Saving Approaches

Part B or Not Part B?

Part B Or Not Part B – That Is The Medicare Question For Federal Retirees With Healthy Retirement Incomes

Federal retirees with healthy retirement incomes are in a unique position when it comes to health insurance.

On the surface, Medicare Part B appears attractive, because you most likely will not incur any co-pays or co-insurance costs with your Federal Employee Health Benefit [FEHB] plan.  Unlike Medicare Part A which is free, Medicare Part B premiums are significant – for an individual with an adjusted gross income just over $85,000 per year are $2,250 per year and for a married couple just over $170,000 are $4,500. Keep in mind the FEHB plan covers 100% of medical expenses once the annual out-of-pocket maximum is reached – typically $5,000 for an individual and $10,000 for a couple.

In most cases even with periodic, major medical expenses, carrying Medicare Part B in addition to an FEHB plan will cost more than it will save you in out-of-pocket costs.  There are a few cases where the cost of carrying Medicare Part B more than pays for itself.  It all depends on your individual circumstances.

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Worried About Your Investment Returns?

A Little Apathy Might Be Good For Your Long-Term Investment Returns

We often (maybe too often) beat the drums about staying the course and thinking long-term.  We recommend this article; in which, Barry Ritholtz eloquently justifies several of ClearLogic’s Investment Principles regarding long-term thinking.

Here are a few of our favorite quotes from the article:

  • “investors spend too much time worrying about risks that are either statistically unlikely or,
    conversely, the kind of risk that ends up being good for their portfolios over the long haul.”
  • “over the past century, U.S. stocks have returned about 10 times what Treasurys have,
    although they also experienced numerous massive selloffs over that time”
  • “Politics and investing don’t mix…How does knowing the political party of a president impact
    a portfolio if a portfolio will outlast the administration? People who make decisions out
    of fear or politics miss out.” 

There will be market corrections, some significant.  (This why at ClearLogic we prepare for them in our clients’ portfolios and financial plans and work with our clients so that they are prepared for them not just financially, but also mentally and emotionally.)

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Quarterly Market Review: 2017-Q2

Quarterly Market Review: 2017-Q2

Global stock markets again rose during the second quarter of 2017. Additionally, both US and international bond markets were up, making the second quarter of 2017 positive across the board. Last quarter, we noted that international stock markets outperformed US stock markets, reversing a trend we had seen over the past few years. The reversal continued this quarter with international stocks returning about double what the US stock market returned.

Of ClearLogic’s 10 Investment Principles for long-term conservative growth, most at play this quarter were “look beyond the headings”, “practice smart diversification”, and “let markets work for you”.

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Quarterly Market Review: 2017-Q1

Quarterly Market Review: 2017-Q1

Global stock markets rose sharply in the first quarter of 2017. Over the past few years, US stock markets have outperformed international stock markets, but this quarter reversed that trend. Emerging market stocks in Q1 saw returns that were double that of the US markets, while international developed stocks outperformed US stocks as well. Only international bonds suffered negative returns in the first quarter.

Of ClearLogic’s 10 Investment Principles for long-term conservative growth, most at play this quarter were “avoid market timing”, “resist chasing past performance”, and “practice smart diversification”.

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The Importance of a Fiduciary Relationship

It is essential to clarify and highlight the importance of engaging a financial advisor who embraces the legal and ethical responsibilities of a prudent and trusted fiduciary.

Fiduciary advisors stand apart in an industry crowded with conflicts of interest when it comes to financial planning, investment management, and financial advice. The Certified Financial Planner (CFP) Board of Standards states, “integrity demands honesty and candor which must not be subordinated to personal gain or advantage.” The National Association of Personal Financial Advisors (NAPFA) has its members promise as part of their fiduciary oath to “exercise his/her best efforts to act in good faith and in the best interests of the client”. And NAPFA members also pledge they will “not receive a fee or other compensation from another party based on the referral of a client or the client’s business”. (The article also compares fee-only fiduciary advisors with other types for additional clarity.)

With a fee-only fiduciary, the client gets financial advice that is completely objective and impartial – with transaparent costs and no commissions on investment products sales.  (ClearLogic is a fee-only firm and its financial advisors are both CFPs and NAPFA members.)

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