Episode 43: End-of-year ‘to-do’s’ – Medicare and charitable giving
Oct 22, 2022
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Learn about the intricacies of Medicare enrollment decisions and the importance of making informed choices. Discover how charitable giving can benefit both charities and your personal finances, along with tax-efficient strategies like donor-advised funds. Dive into the world of strategic charitable giving and estate planning for a lasting philanthropic legacy.
Delays in Medicare enrollment can result in costly penalties lasting a lifetime, emphasize the importance of signing up on time.
Understanding Medicare's coverage options like Part A, Part B, and Part D is crucial to making informed decisions.
Donor advised funds offer tax benefits, ease of tracking donations, and instilling philanthropic values in future generations.
Deep dives
Understanding Medicare Enrollment Periods and Penalties
Open enrollment for Medicare Advantage and Medicare drug coverage runs from October 15 through December 7. Delaying Medicare enrollment can lead to penalties, such as a 10% penalty for every year not enrolled, potentially lasting a lifetime. Signing up for Medicare requires careful consideration and advice from professionals to avoid costly mistakes, such as facing penalties for late enrollment.
Breakdown of Medicare Parts A, B, D, and Medicare Advantage
Medicare includes Part A for hospital insurance, Part B for doctor visits, and Part D for prescription drugs. Original Medicare may not cover all expenses, necessitating additional insurance like Medigap policies or opting for Medicare Advantage plans, which offer bundled services but limited network choices. Understanding the coverage options and costs is key in making informed decisions.
Significance of Donor Advised Funds in Charitable Giving
Donor advised funds offer a strategic approach to giving by allowing individuals to donate assets that can potentially grow over time. They provide benefits such as tax deductions, ease of tracking donations, and supporting various causes anonymously. Involving children in the process can instill valuable lessons about giving and ensure a legacy of philanthropy.
Strategies for Strategic Charitable Giving
Employing matching donations, utilizing donor advised funds, and strategizing asset donations can maximize the impact of charitable giving. Matching gifts can amplify contributions, while utilizing donor advised funds enables thoughtful and impactful giving decisions over time. Implementing strategic charitable giving practices can align personal values with financial goals.
Maximizing Philanthropic Impact with Financial Planning
Financial planners play a vital role in integrating charitable giving goals into comprehensive financial plans. They can offer guidance on donor advised funds, donation matching, and developing a strategic approach to giving that aligns with individual values. By incorporating philanthropy into financial planning, individuals can optimize their giving impact while securing their financial well-being.
During Medicare enrollment, there are many decisions to make that could cost you a lot if you don’t choose wisely. In this episode of Edelman Financial Engines’ Everyday Wealth™, Jean, Soledad and wealth planner Rose Niang explain the intricacies of Medicare plans and what you need to know to help you make the best decisions. Later in the episode, charitable giving is good for charities and it also could be good for your personal economy. The hosts discuss giving in a tax-efficient way and how a donor-advised fund can help.
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Ms. Chatzky and Ms. O’Brien receive cash compensation for acting as hosts of the Everyday Wealth radio show and podcast and for related activities and therefore have an incentive to endorse Edelman Financial Engines and its planners. That compensation is a fixed sum paid on an annual basis; and reimbursement for certain expenses. The amount paid each year does not vary, is not based on show content or any results-dependent factors (e.g., popularity of the show).
This material was prepared for informational and/or educational purposes only. Although the information has been gathered from sources believed to be reliable, we do not guarantee its accuracy or completeness.
Neither Financial Engines Advisors L.L.C. nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to seek advice from qualified tax and/or legal experts regarding the best options for your particular circumstances.