Announcer:
It’s time now on KROS for Financial Focus, brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated. A broker-dealer, member of FINRA, SIPC. Investment advisor representative, Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. Now, here’s today’s Financial Focus program.
Nate Kreinbrink:
Good morning and welcome to this week’s Financial Focus brought to you each and every Wednesday morning right here on KROS. This is Nate Kreinbrink bringing you today’s show.
Another beautiful March morning out here today. I know a lot of the area schools are on spring break this week. Been able to enjoy, up until this point, some pretty pleasant March weather. It looks like we may get a little rain, maybe storm weather coming in tonight, cooling off a little bit for the rest of the week. But again, we’re getting close to 70s, it looks like again today. Open up the windows, enjoy that nice spring weather. Starting to see some of the buds on the trees pop. Grass is greening up. We’re getting close. We are getting close. So hopefully, Mother Nature continues to remember that we are in spring and we continue with some of this pleasant weather that we’ve been having.
Another exciting time of the year. Obviously, we had the Big Ten women’s basketball tournament last weekend, Iowa bringing home its third straight championship. Men’s Big Ten basketball championship this weekend. And then, obviously starting March Madness for both of them next weekend. So, if you are a basketball nut or you’re into that, the old saying, “It is March Madness,” it is here. It’s an exciting time, like I said. With the tournament going on in all of that, spring sports are underway for some of the local schools. Golf track, getting into those. So, an exciting time. It’s glad to see weather turning. I always say it’s good time when you put that winter behind you and move on to the warmer temps that we have here. Hopefully, coming up in this time. So, enjoy it while it’s here. As they always say, “It will change, just wait a day. If you don’t like it, it’ll change.”
So, getting into today’s program, I know there’s been a lot of headlines going on. One of the most recent ones that has kind of, again, I want to say impact of the market, but has been tied to the market is interest rates and inflation reports. The latest inflation report came out yesterday. Again, was seeing inflation kind of level off, if not maybe raised just slightly, kind of anticipated coming into what that was going to do. But the more important factor is to see how that’s going to impact what the Fed is going to do going forward.
Obviously, 2022, we saw inflation peak at roughly 9.1%. One of the highest levels we’ve seen for quite some time. And obviously, the Fed to combat that, started raising interest rates, pushing them up to try to get that inflation number down. We’ve seen that trend continue up until third quarter of last year, where the Fed stopped raising rates. Inflation continued to trickle down just slightly. And then, interest rates held still.
As we transitioned into 2024, again, the big talk was, “Okay, when is the Fed going to start cutting rates?” March was kind of the first big target date that some of them had circled on their calendars, that maybe the first one with some of the last couple of inflation reports, seeing inflation kind of mellow out a little bit, and it has kind of have them back off a little bit with that stance. Not saying they’re not still going to cut rates, just maybe obviously not at the March meeting, pushing that back a couple months and seeing when that does.
Obviously, if we see them starting to cut rates, it won’t be drastic. It’ll be probably a quarter of a percent to maybe a half a percent, but more than likely a quarter of percent cuts and increments, and seeing if they do that possibly two to three times this year. And hopefully, that inflation number continues to stay down and continues to get closer to that 2% target that the Fed would like to get it down to.
So again, when we see that happening, obviously mortgage rates with where they are, rates start getting cut, you might start seeing a correlation to mortgage rates starting to slowly come down again. If so, you might see a little boom in the real estate market with activity. Those that are taking advantage of where rates currently are in any savings environment that they have, again, rates start coming down, you’re going to see an impact on those saving rates as well. As far as renewing possibly CDs or bank and things like that, as far as what you are getting for an interest rate.
So again, it does have some correlation to what we are looking at all the time. And again, understanding what that move would make to you personally. Again, we see a lot of times these headlines, you’re like, “Does this even impact me?” And a lot of times, maybe not directly, but definitely indirectly, there’s going to be some impact as far as what we are going to see if, and I guess when the Fed does start cutting rates. So, we will continue to keep an eye on it as things kind of play out a little bit clearer. We’ll obviously dive a little bit deeper into that in some upcoming shows. But again, just wanted to kind of hit that today, as it has been something that’s been in the headlines for quite some time.
Doing a switch in gears here now, I wanted to cover a different topic too with the last part of the show that we have today, as we’re continuously seeing questions come in on this and understanding what the different options are, and that is understanding Medicare. When you have an individual that is transitioning into Medicare, for most individuals, the earliest that you can get Medicare is age 65. So again, if you are retired and you are turning 65, you’re going to probably start to get information in the mail from all the different companies wanting you to sign up for their plan. A lot of times then that becomes overwhelming because of just the bombardment of information that an individual is receiving at that time.
And then, quite frankly, understanding basically the two different ways as far as what you can get Medicare from. There’s differences, there’s pros, there’s cons, there’s benefits to each of them. But again, for every individual, there’s different things that we want to look at to see maybe which one would best be suitable for them to cover their healthcare needs.
Again, it’s a time period where, again, you get accustomed to a work plan that you had that has done it this way, that you paid this. Obviously, if you have a work plan, the company is paying some of that. So, again, transitioning into that Medicare phase is what you want to do.
The first thing that you really need to know is that, again, three months prior to you turning 65, if you have not already done so, you want to file for your Medicare Part A, as well as your Medicare Part, B. That can be done through the Social Security .gov website. That’s ssa.gov.
You can go on there and file for your Medicare Part A and Part B. You’re going to want to put on there an effective date. If you are retired, if you’ve been getting insurance through the marketplace, and if you’re going to transition over to Medicare, again, you’d put the effective date as the first day of the month as far as when you turn 65. Because again, getting that Part A and Part B taken care of, you’re going to get a card in the mail with an effective date on there, and obviously your Medicare number. You’re going to need that to put down as far as whichever route that you go to.
So, again, getting that taken care of ahead of time, as soon as you can, you can get that done up to three months ahead of time as far as you turning 65 to go ahead and get that done.
And then, once you get those numbers, then you want to start looking at the different options, whether you go through a supplement plan or you go through Medicare Advantage. And again, understanding what each of those are and the differences of each one of those.
With Medicare with a supplement, if you go through that route, it’s important to understand that a supplement with one company is the same as a supplement with a different company. That is standard through Medicare. So, if you get a certain plan, a plan G, plan N, whatever it may be, it is the same type of coverage from one company to the other company. One company’s plan G is not different than another company’s plan G. What they cover is all the same.
If you go the supplement route, usually you can go to any provider that takes Medicare. So, as far as a network, as long as they take Medicare, you are able to get your coverage through that provider. As far as a cost to that, there is a set premium that you will pay each and every month. Whether you go to the doctor one time, you don’t go at all, or you go every single day, you’re going to pay a set premium each month as far as for that supplement plan. And normally, what we’ll end up doing is looking at adding a drug plan that we need to have as well to go that route. So, again, that’s one way you go.
The other way that people tend to look at is Medicare Advantage plans. Medicare Advantage is you have little to possibly no monthly premium. You end up paying a little bit more though when you do use the service. When you go to the doctor, you will pay a little bit more than that flat premium if you went with the supplement route. So, again, pros, cons with it.
One thing with Medicare Advantage plans is that they do require you to go to a network that is approved through that specific Advantage plan. So, again, around here networks are usually pretty strong. But again, if you’re going to a certain doctor or a certain care provider, you want to make sure that that provider is covered underneath your Medicare Advantage plan. Certain providers are under certain plans, so not all Medicare Advantage have the same networks. So again, understanding that. And if it works, it may be the right move for you. A lot of times too, Advantage plans carry a drug plan with them that you have as part of the plan with them.
So, again, a lot to go through with some of this. You could spend multiple shows diving deeper into some of that. But again, understanding just the basics as far as you near age 65, what your options are, some of the main differences for it, so that way you can start narrowing it down and see which route that you want to go to.
So, if you’ve got questions on that, feel free to give us a call. We’d be happy to go through your options and just have you have a better understanding, so when you make that decision, you’re comfortable with it and you’re understanding what it is that you’re choosing. So, give us a call. We’d be happy to help you out.
As time is running out here though, I did want to mention that every Friday, NelsonCorp Wealth Management is wearing jeans for charity. Money raised in the month of March will be donated to the Kiwanis Club here in Clinton.
Again, this is Nate Kreinbrink with NelsonCorp Wealth Management, bringing you this week’s Financial Focus. Thanks again for tuning in and have a great rest of your week.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in the show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative securities offered through Cambridge Investment Research Incorporated, a broker dealer, member of FINRA, SIPC. Investment advisor representative Cambridge Investment Research Advisors Incorporated, a registered investment advisor. Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com.