Employee Retirement Income Security Act (ERISA)

 protects 401(k)s from creditors after a bankruptcy. One of the provisions of the Act prevents creditors from liquidating your retirement savings. This usually applies regardless of the amount held in the account, meaning even high-net-worth individuals with large 401(k)s won’t have them seized and sold off to pay back creditors.

The ERISA does not explicitly extend to self-funded traditional and Roth IRAs. Instead, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) 

 as of 2023. This limit changes periodically, and there are additional rules pertaining to rollover IRAs.

 to extend the full bankruptcy protection of ERISA to IRAs as well. People filing for bankruptcy who are concerned about shielding their retirement savings from creditors should consult with a bankruptcy attorney to learn more.

Why Are 401(k)s Exempt From Bankruptcy Liquidation?

The ERISA was passed to safeguard employee benefit plans and beneficiaries. It primarily deals with imposing fiduciary responsibilities on plan managers and setting minimum standards to protect the interests of people who would rely on those funds in retirement.

The government has an interest in safeguarding these types of plans because it means people will be less likely to rely solely on the government for income and benefits in retirement. Ensuring those plans are a safe haven for assets, including providing some protections from creditors, helps accomplish this goal. 

The added protection against creditors can potentially lead to abuse, which is why there are contingencies built into ERISA’s bankruptcy protections. Retirement savings accounts cannot be legally used reactively to shield assets from creditors for the purpose of avoiding the repayment of debt.

The Exceptions for Retirement Savings and Bankruptcy Vulnerabilities 

There are two primary scenarios in which a bankruptcy filer’s 401(k) may not be protected under the ERISA. These are:

Who Determines Whether Contributions Were Excessive or Fraudulent Conveyance?

Bankruptcy trustees are typically responsible for examining the debtor’s actions leading up to the bankruptcy filing. If the trustee doesn’t notice discrepancies, but creditors find signs of excess contributions or fraudulent conveyance, they can raise objections in bankruptcy court.

The ultimate decision on whether either occurred is up to the bankruptcy court, which is responsible for examining evidence, the debtor’s alleged motives and determining whether retirement funds should be seized or exempted.

What About Funds Rolled Over From an ERISA Account Into a BAPCPA Account?

Technically, under federal law, funds rolled over from an account shielded by ERISA, like a rollover IRA, should continue to receive full ERISA protection rather than the more limited BAPCPA protection. However, it’s important to consult with a bankruptcy or tax attorney to understand the full implications and ensure actions aren’t interpreted to be fraudulent conveyance.

Exemptions, Withdrawals and Tax Implications

Legally shielding assets in bankruptcy can be complicated. Debtors filing for bankruptcy are required to thoroughly claim and document all the exemptions they seek to utilize. Mistakes can potentially leave some assets vulnerable to creditors.

Money that is withdrawn from an exempt retirement savings plan will no longer be protected by state or federal law.

Seeking to avoid bankruptcy by withdrawing retirement savings to cover debt could end up being counterproductive.

There can also be serious tax ramifications for early withdrawals. Before making any decisions regarding early withdrawals, it’s likely in your best interest to seek professional advice from a qualified bankruptcy lawyer.

Client-Centric Retirement Savings Guidance in Phoenix

Retirement savers in Phoenix who are seeking 

 services can speak with the financial advisors at Fullerton Financial Planning by calling 

. People in all types of financial situations deserve a secure retirement, and our advisors are here to help. 

Is Your 401(k) Protected in Bankruptcy?

The vast majority of income tax filers in the United States, regardless of their age, would prefer to minimize their tax burden. How you can go about maximizing deductions will vary based on your assets, income sources and your annual expenses.

There’s no straightforward, one-size-fits-all approach due to the diversity of financial situations among tax filers. Some Phoenix tax filers can afford large charitable contributions while others might have particularly high medical expenses due to a family illness or injury. Both types of tax filers may want to take advantage of itemized deductions to reduce their taxes, but how they go about it may be different.

Although the approach might vary, there are some high-level factors to keep in mind when you begin looking for ways to maximize tax deductions.

If your income fluctuates from year to year, it’s likely a good idea to keep an eye on your tax bracket and be cognizant of how close you may be to reaching a higher or lower marginal tax rate (the rate you’ll pay on your highest dollars of taxable income). Knowing where your income puts you may allow you to strategically plan your income and deductions to potentially decrease your tax rate for the current year or future years.

Have You Maximized Your Retirement Contributions?

Some workers may benefit from maximizing their contributions to pre-tax retirement savings accounts like 401(k)s or traditional IRAs. Contributions to these types of accounts reduce your taxable income, regardless of whether you end up itemizing deductions.

Although Roth IRAs and 401(k)s are not tax deductible and are funded with after-tax dollars, they do offer tax-free growth of invested funds, as well as the potential for tax-free withdrawals in retirement. Those who meet income eligibility requirements and are taking a long-term view on positioning themselves for a reduced tax burden in retirement may want to investigate these types of investments during their working years.

Consider Maximizing Health Savings Account (HSA) Contributions

While maximizing HSA contributions won’t be the best move for everyone, these tax-deductible accounts are similar to Roth retirement savings accounts in that they offer tax-free growth and tax-free withdrawals for any qualifying medical expenses.

How much you or your family will use HSA funds depends on your health insurance and medical needs. These accounts can be a useful way to minimize your taxable income if you know you’ll need to spend money on healthcare expenses, or you just want to make sure you’re prepared for the unforeseen.

Itemized deductions allow taxpayers to decrease their taxable income, which can potentially allow them to benefit from a lower tax bracket and marginal tax rate. Itemizing deductions is the alternative to the standard deduction, which is a fixed deduction amount that’s based on filing status. Itemized deductions require detailed tracking of eligible expenses throughout the year.

Although there are many potential itemized deductions, some of the more common include:

You might not know whether to take the standard deduction or itemize until closer to the end of the year, which is why it’s likely in your best interest to track any potential deductions throughout the year. Doing so may make it easier to decide when you start preparing your tax return. Keep in mind that itemizing requires good recordkeeping and organization, as you may need to substantiate your claims to the IRS.

While tax deductions decrease the amount of income subjected to taxes, tax credits reduce the amount of taxes you owe after they have been calculated. They provide a dollar-for-dollar reduction in tax liability in either a refundable or non-refundable form.

A refundable tax credit means that if what you owe goes into the negative, you can get the difference refunded, while non-refundable credits can only reduce your tax liability to zero.

Your preferred capital gains tax strategy may vary depending on your income sources, age and financial situation. Every taxpayer is assigned a short-term and long-term capital gains rate based on their income tax bracket. The short-term rate is the higher rate and is applied to any gains on assets sold less than a year after purchase.

Many taxpayers choose to hold onto investments for at least a year before selling to avoid the higher rate, but how you approach capital gains or investment loss harvesting may vary depending on your circumstances.

Get Guidance on Financial Planning, Investment Management and Retirement Planning in Phoenix

If you’re interested in finding ways to minimize your taxes or position yourself for a reduced tax bill in retirement, the financial advisors at Fullerton Financial Planning may be able to help. We make 

 and are ready to answer your questions and provide solutions. Call us at 

How to Reduce My Taxes and Maximize My Tax Deductions

While some aspects of life become simpler in retirement, taxes are not necessarily one of them. Determining whether you owe income tax on your Social Security Benefits and the amount you owe can require a bit of extra work. It’s one of the reasons why so many retirees turn to income tax preparers with experience assisting SS beneficiaries.

Before performing the calculations, tax filers need to ascertain their:

You can use that information to ascertain your “combined income.” Single filers with a combined income between $25,000 and $34,000 are required to pay income taxes on 50 percent of their Social Security benefits. Filers with combined income over $34,000 owe taxes on up to 85 percent of their Social Security benefits. Those with a combined income of less than $25,000 don’t owe income tax on any of their Social Security Benefits.

The income limits are slightly higher for married filing jointly beneficiaries. Couples with a combined income between $32,000 and $44,000 owe tax on 50 percent of their benefit while those with a combined income over $44,000 will need to pay taxes on up to 85 percent of their benefits. SS benefits typically are not taxable for couples with a combined income of less than $32,000.

Combined Income = Adjusted Gross Income + Non-Taxable Interest + Half of Social Security Benefits

To get your adjustable gross income, you need to add up all your income and subtract eligible adjustment deductions. Income categories may include:

Many adjustments are most commonly available to people who are still working, such as contributions to traditional IRAs, student loan interest or some of your self-employment taxes or health insurance. It may be in your best interest to consult with a tax planner for clarification if you’re not sure whether certain expenses qualify for inclusion in your adjusted gross income calculation.

Although non-taxable interest is not itself taxed, how much of it you earn does influence the combined income equation and, as a result, does have tax implications. 

Some examples of non-taxable interest might include:

If you have questions about the taxability of any of your interest earning holdings, or whether that interest should be calculated to reach your combined income, you should consult with an experienced accountant or tax preparer. 

Depending on your income streams, retirement savings and benefits, calculating your combined income may be complicated. Gathering all the relevant documents in advance, including your SSA-1099, 1099 forms for interest and dividends and any other income records, can make the process easier. A professional may also be able to identify relevant deductions that could potentially reduce your adjustable gross income.

It may be helpful to keep this calculation in mind when deciding whether to work in retirement or how to structure your income after you begin collecting your Social Security benefits. Your earnings through part-time jobs or freelancing could potentially increase your tax burden due to a higher combined income calculation.

Timing of income and distributions from retirement accounts as well as tax-deferred accounts like Roth IRAs may allow you to better modulate your combined income and have a positive influence on your Social Security benefits taxes.

Get Help With Your Social Security or Medicare Benefits Planning in Phoenix

? Are you interested in learning more about tax-advantaged Social Security Benefits or 

? The financial advisors at Fullerton Financial Planning are here to provide clarity and answers. 

Calculating Taxes on Social Security Benefits

The list depends on the account or property type as well as the attributes of your trusts and estate. Some assets and financial accounts of value are designed to automatically sidestep probate by going straight to named beneficiaries. This can include all types of retirement accounts, like IRAs and 401(k)s, as well as life insurance policies.

Although these types of accounts are designed to make the change in ownership seamless after the passing of the original holder, there may still be scenarios where it’s beneficial to name a trust as the beneficiary for tax purposes.

Vehicles – unless they’re collectibles or of particularly high value – are another example of assets that likely don’t need to be included in a trust. The speed with which vehicles depreciate makes them dissimilar from the types of assets stored in trusts, which typically have the potential to gain value over time.

Everyday personal property also doesn’t usually need to be put into a trust, like the books on your bookshelf (unless they’re collectibles) or your dishes and cutlery. The total value of those types of everyday items isn’t normally high enough to have tax implications and there’s less likely to be serious disputes over the distribution of this type of personal property.

In most cases, families struggle to decide what to do with this type of personal property rather than fight over who gets household items after a loved one’s passing. 

It’s best to discuss your unique circumstances with an estate planning attorney experienced with trust strategies before deciding exactly what should or shouldn’t be included in your trusts.

Why Trust Structure May Influence Your Decisions

The features of revocable and irrevocable trusts may influence your decisions regarding what types of property should be included in the trust.

Revocable trusts are those in which the grantor (the person who establishes the trust) can alter, amend or revoke the trust. In other words, they retain control over the assets and can essentially function as the trustee. A revocable trust may become irrevocable on the grantor’s death.

High-value personal property, like collectibles or art, real estate and investment accounts may be ideal assets for a revocable trust because they can pass to beneficiaries on the grantor’s passing without probate. The downside is that the continued control of the assets by the grantor means they are still considered part of their estate during their life, which can have negative tax implications.

Irrevocable trusts can’t be easily changed or revoked during the grantor’s lifetime. They essentially relinquish control over the assets placed in the trust, which can have tax planning, Medicaid planning and asset protection benefits.

Certain death benefits, like life insurance policies, can be removed from the grantor’s taxable estate via an irrevocable trust, as can other high-value assets.

Many assets you might not put in your typical revocable or irrevocable trust may fit better in a specialized trust. You might also want to use different types of trusts tailored to your family situation or personal long-term goals.

For example, you may establish a special needs trust if you have a child or dependent who has a disability. Assets held in the trust won’t affect the beneficiary’s eligibility for means-tested government assistance.

When Might It Be Necessary to Put Accounts With Named Beneficiaries Into a Trust?

While these accounts can often bypass probate thanks to having a named beneficiary, they are still considered part of the decedent’s gross estate. This means the government will calculate those assets when determining whether the estate is subject to estate taxes.

Life insurance typically isn’t taxed like income for beneficiaries, but the death benefit is still calculated into the decedent’s estate value. This can potentially be avoided with an irrevocable life insurance trust.

Retirement accounts are a little more complicated in that the proceeds will be subject to income tax for the beneficiaries. Whether the retirement savings account is a traditional IRA or 401(k) or Roth account will also influence the tax implication for beneficiaries, as accounts funded with after-tax contributions will still provide tax-free distribution (although specific disbursement rules often apply).

Consult With a Phoenix Estate Planning Expert and Financial Advisor on Your Trust Options

Our team at Fullerton Financial Planning work closely with 

 services to Phoenix retirement savers and 

If you’d like to learn more about our comprehensive retirement planning services, call us at 

Which Assets Should or Should Not Be in a Trust?

Which sectors are best for your investment dollars in 2024 will be highly dependent on who you ask and how the year progresses. If you have questions about how to optimize and diversify your portfolio in the upcoming year, it’s likely in your best interest to speak with experienced 

investment managers and financial advisors

There's continued interest in technology, particularly in the realm of generative AI. This sector includes companies developing and 

. The focus may shift from big tech companies to those specializing in growth sectors like semiconductors and hardware, as well as small and mid-cap companies that offer 

Many companies may also be forced to invest in improving things like cybersecurity and digital infrastructure to counteract greater bandwidth demand and the increasing capabilities of bad actors. 

 a strong candidate for investment, especially companies that provide essential services and equipment. Funding in the healthcare space is expected to return, particularly when it comes to medical equipment and analytical tools. There's also growing interest in companies involved 

 and medical tech advancements, as well as novel treatments for diseases like Alzheimer's​​​​.

 from an end to the Federal Reserve's hiking cycle or a decline in rates in 2024. This sector might see increased demand for rental housing, making companies involved in home leasing and apartment investments attractive​​​​.

Companies in the basic materials sector, which produce essential components used across various industries, could see growth as they come out of a 

. This sector includes firms specializing in chemicals, metals and other fundamental materials​​.

Traditional players in the semiconductor space, particularly those involved in memory and personal computing, are 

. Companies that produce industrial-type semiconductors could become leaders if 2024 leads to inventory corrections​​.

If the U.S. avoids a recession and achieves a soft landing, cyclical sectors like materials, industrials and consumer discretionary could lead. Conversely, if a recession occurs, defensive sectors like healthcare, utilities and consumer staples might be more favorable​​. Investors should be cautious when making assumptions when there are still many unknowns about the upcoming year.

Depending on how 2024 progresses, there could potentially be growth in the service sector. This could include industries like entertainment, hospitality and leisure, where consumer spending can significantly impact company performance.

Companies involved in the construction, engineering and maintenance of infrastructure projects could benefit from large investments in infrastructure in the United States and globally. This sector covers a range of activities from transportation infrastructure to urban development.

You may have seen the term “cardboard box recession” occasionally thrown around in 2023, as well as worries on how it may have been a forbearer of reduced consumer purchases (things typically shipped in cardboard boxes). Potential improvements in cardboard boxes may hint toward strengthening manufacturing companies in 2024, 

. As with all sectors, growth is never guaranteed, and it will be necessary to watch how the next year unfolds for manufacturing.

Economic Performance May Significantly Influence Your Preferable Course of Action

The best markets for your portfolio may change as 2024 progresses and economic conditions change. There are a variety of macroeconomic factors that influence the performance of different sectors, including things like consumer spending, inflation and interest rates. While 

 can influence these factors, only time will tell what is going to happen.

For instance, technology and consumer discretionary sectors might thrive if the economy continues to grow, while more defensive sectors like healthcare and utilities could gain favor in a slowing economy. It's also crucial to consider emerging trends, such as advancements in artificial intelligence or shifts in energy sources, which could impact specific industries.

Investors who manage their own portfolios will need to stay informed about these trends and consider how different sectors might respond to ongoing economic changes. This kind of sector analysis can be a valuable tool for making informed investment decisions and diversifying portfolios.

Providing Guidance for Retirement Savers and Investors in Phoenix

Whether you’re a retiree, nearing retirement or busy with everyday life, closely following the health and performance of sectors and making quick, informed decisions might not be the way you prefer to spend your time. Making big investment decisions can have a significant impact on your future, and it’s often beneficial for investors to have an informed and knowledgeable professional in their corner for assistance and guidance.

The team at Fullerton Financial Planning is committed to helping all types of investors navigate the uncertainties of 2024. Don’t hesitate to call us at 

 Investment Sectors to Watch in 2024 


Defensive Positioning and Early-Cycle Recovery

, adopting a more defensive portfolio position may be advisable for some investors. This could mean favoring fixed income rather than growth-oriented investments. Some sectors, like industrials, materials and healthcare, may provide long-term value and stability, especially in projects related to infrastructure development.

Diversification remains a crucial aspect of portfolio optimization. This includes diversifying across asset classes (like stocks, bonds, precious metals and cash) and within the stock market across different sectors, investment styles, company sizes and regional exposures. 

Certain investment options, like Exchange-Traded Funds (ETFs), may be an effective way to achieve diversification, especially for gaining regional exposure or for those building up a portfolio​​.

As economic conditions evolve in 2024, there could be a shift from defensive assets to those that typically outperform in the early stages of an economic rebound. This might include riskier equity classes and commodities, as well as locking in attractive long-term bond yields​​.

For qualified investors and some retirement savers, diversifying into alternative investment strategies like defensive hedge-fund and private capital strategies could be beneficial. These investment vehicles may provide diversification during times of volatility in traditional equity and bond markets​​.

Adapting to Digital and Infrastructural Changes

The investment landscape is rapidly evolving with an emphasis on technological innovation and concerted investments into healthcare and infrastructure investments. It may be in your best interest to speak with an 

 to learn how your portfolio should adapt to these changes and whether they should be incorporated into your investment strategy​​.

Artificial Intelligence is playing an increasingly important role in shaping investment strategies. AI-driven insights are helpful in navigating from traditional mutual funds to active ETFs, identifying growth opportunities in cybersecurity and assessing the sustainability of investments​​.

Real Estate and Fiscal Policy Considerations

 may be nearing their end. The year and a half of rate increases and the potential 

 will continue to influence real estate dynamics and potential fiscal policy shifts. While there is optimism fueled by rate cuts, it should be combined with caution due to the inherent uncertainty of markets. 

What Do the Changing Conditions in 2024 Mean for Your Investments? 

Many retirement savers can benefit from being adaptable, staying informed about market trends and maintaining a diversified investment approach to navigate the challenges and opportunities in 2024.

 about inflation. This optimism is based on recent data showing a cooling of price spikes, leading to a projection of three rate cuts for 2024. The Fed's preferred inflation gauge, which rose three percent over the 12 months ending in October, is expected to fall closer to their two percent target​​ toward the end of 2023 and early 2024.

The anticipated rate cuts may be interpreted as a positive sign that the U.S. might overcome inflation without triggering a recession or a significant increase in unemployment. This outlook could be a potential boon for many investors and retirement savers, especially considering the economic challenges of the past few years​​.

The Fed has been pursuing a balancing act where they utilized rate increases to get inflation under control without causing a potentially avoidable slowdown. Although they haven’t yet reached their two percent target on the inflation gauge, and they haven’t entirely committed to a strategy of rate decreases, they do want to avoid causing an overcorrection and slowdown. 

There Are No Guarantees in the Market or Economy in 2024

There are a variety of competing narratives about what 2024 may bring for investors of all kinds. This level of uncertainty can make it hard for the average person to make well-informed decisions that aren’t driven by overexuberance over a single event or overcautious morosity about the state of the economy. 

 like those at Fullerton Financial Planning, can help ensure you continue to pursue an informed approach. Our experts are constantly apprised of changing conditions and optimize investment strategies to maintain the preferred level of growth potential and risk reduction for every retirement saver and investor, whether they are looking for aggressive growth or defensive wealth preservation. 

 to speak with a financial advisor today. 

 Why You Should Look at Optimizing Your Portfolio for 2024

The transition from private or employer-provided health insurance to Medicare is a pivotal juncture for people nearing or entering retirement. Many older Americans are understandably concerned about their continuity of care as they embark on this new life chapter.﻿

One of the most common questions asked by people looking at Medicare is whether they can continue seeing the same doctors. This is especially important if you like and trust your doctor and don’t want to change to a provider you don’t know. 

If your doctor doesn’t accept Medicare, then no, you likely won’t be able to keep your same doctor in retirement. The good news is many doctors do accept Medicare, especially if they often treat geriatric patients (those 65 years of age and older), so you likely won’t need to change your primary care physician.

Under traditional Medicare (Parts A and B), beneficiaries have the flexibility to see any doctor or healthcare provider who accepts Medicare without the need for referrals. Original Medicare’s open network is one of the key advantages of traditional Medicare.

Medicare Advantage is a bit more complicated. Since Part A and Part B are included in any Medicare Part C plan, you will be able to continue seeing any of your previous doctors as long as they accept Medicare. Whether you can continue seeing your dentist or optometrist will depend on whether they are in your Medicare Advantage plan’s network.

Medicare Part C plans are offered by private insurance companies approved by Medicare and may have more restrictive networks compared to traditional Medicare. If you really like your current dentists or other specialists, be sure to ask them which networks they accept before you enroll in a Medicare Advantage plan.

It's important to review the specific plan details or contact the plan provider to understand the network limitations. Some doctors may only accept Medicare plans under certain conditions or may not be accepting new Medicare patients.

Beneficiaries should directly contact their doctors or use the 

 tool to verify if their providers are Medicare-approved.

The providers you can choose is determined by Medicare's network, not by your Medigap policy. Medigap simply helps cover some of the out-of-pocket costs associated with Medicare-covered services.

What If My Doctor Doesn’t Accept Medicare?

It may be a good idea to start doing research on doctors or specialists prior to losing your current health insurance so you don’t get an unpleasant surprise when you try to schedule an appointment after enrolling in Medicare. If you like your current doctor but they don’t accept Medicare, ask them for recommendations or referrals. They may have colleagues they trust who do accept Medicare or are in-network for your Medicare Advantage plan.

Why Is Medicare Advantage More Restrictive?

One of the goals of Original Medicare is to provide health insurance that is good almost anywhere. Medicare Advantage is more like traditional health insurance, so the networks are inherently more restrictive. That doesn’t mean it’s bad – it just means you may need to adhere to the same network restrictions as people who don’t have Medicare.

Not all Medicare Advantage plans are equal in terms of provider network composition. Some plans offer broader network access than others. Some Medicare Part C plans may also require referrals to see certain types of specialists.

Like with any other private health insurance plan, you may need to pay higher fees if you need to see an out-of-network provider.

These restrictions do not mean Medicare Part C is worse than Original Medicare – especially considering those types of specialists are likely not covered at all by Part A or B. For most retirees, a Medicare Advantage plan that’s accepted by most local specialists is the best solution for health insurance.

Get Help With Medicare Planning and Choosing the Right Medicare Advantage or Medigap Coverage

Medicare may seem deceptively straightforward as you near retirement age. It’s a free benefit you’re entitled to – so what’s there to think about? Although Original Medicare can save retirees some money, it’s not a comprehensive health insurance solution. Medicare strategy can play an important role in your retirement future, especially as your health and medical costs change.

The team at Fullerton Financial Planning can 

 the variables and answer the tough questions, like:

We partner with Medicare strategy experts to ensure our clients get accurate answers to these important questions. We’re committed to ensuring your retirement won’t be derailed by unexpected out-of-pocket healthcare costs that could have been avoided with the right coverage.

 Can I Keep My Current Doctor When I Transition to Medicare? 


There are four different Medicare “Parts,” each of which offers 

Medicare Part D only covers prescription medications and is typically purchased by itself in a standalone policy or rolled into a Medicare Advantage plan (Part C) for retirees who sign up for the added coverage. If you’re like many retirees, you may be wondering:

What Is Not Covered by Original Medicare?

Original Medicare does cover a variety of medical services and supplies, but it’s more restrictive than many employer-provided health insurance plans and Medicare Advantage plans (Medicare Part C).

There are some scenarios in which some emergency services or necessary procedures of the above could be covered by Original Medicare. For example, if your doctors determine cataract surgery is medically necessary, it could be covered by Medicare Part B – even though vision care typically isn’t covered. 

Even when some of these services are deemed medically necessary and covered, the services, treatments or medical devices to which the beneficiary is entitled will be inherently restrictive.

In other words, someone on Medicare Part B who did get their cataract surgery covered might not be entitled to the premium intraocular lenses that would correct their vision at multiple distances. If they did want the better lenses, they would have to pay the difference out of pocket.

While not all Medicare Advantage plans are equal, someone who does have Medicare Part C may be entitled to a variety of routine vision services, treatments and potentially even the premium lenses at no additional out-of-pocket cost. 

What is and isn’t covered by a Medicare Advantage plan is often dependent on the unique plan. Higher-cost plans may cover a wide range of procedures.

Coverage for Assisted Living, Nursing Care and Memory Care

There’s a notable absence in the coverage provided by Original Medicare and Medicare Part C – coverage for long-term assisted living, nursing care and memory care. An 

 of U.S. seniors are currently living in assisted living facilities, with another 4 percent living in nursing homes. Both are pricey, with the average cost of assisted living being roughly $4,300 a month and the median cost of a private room in a nursing home being $9,000 a month. For comparison, the average cost for a full-time home health aide is just over $4,500 a month.

 in skilled nursing facilities, inpatient hospital stays and hospice care, but the percentage covered varies based on the length of the stay. Luckily, there are alternative insurance options to cover or defray the cost of assisted living, memory care and nursing care.

Long-term care insurance is designed to cover costs associated with assisted living facilities, nursing homes, in-home care and other long-term care needs. The percentage of costs and the length of stay covered varies depending on the policy.

In other words, the higher the premium you pay, the longer the stay in assisted living or a nursing home will be covered – but these policies are typically finite. There’s also no renewing long-term care insurance, meaning if you had coverage for three years and use it up, you typically can’t renew the policy for another three years.

There are a variety of other financial tools retirees can potentially utilize to cover the cost of nursing care or assisted living, including certain veterans’ benefits and life insurance policies. Homeowners may also be able to leverage financing tools like a reverse mortgage to obtain funds for assisted living.

Retirees who exhaust all their insurance and assets may also qualify for Medicaid, which can defray many of the costs of long-term stays in some facilities.

Protect Yourself and Your Family From Ongoing Care Expenses

﻿The most expensive part of retirement often comes at the end when the retiree requires full-time care and assistance in some type of nursing or memory care facility. Even people who saved for retirement may find their nest egg dwindling rapidly in a facility that costs $9,000 a month or more.

There are steps you can take as you near retirement age or even while you’re in retirement to safeguard yourself, your spouse and your family from these high costs. The team at 

 can explain your various insurance and financial options to ensure you don’t run out of resources or drain the assets you were hoping to pass on to your children or grandchildren. Call us at (623) 974-0300 to learn more. 

 What Is Not Covered by Medicare? 


Both Medicaid and Medicare were established on a federal level through the Social Security Amendments of 1965, which were initially signed into law by President Lyndon B. Johnson. Medicaid was intended to provide health insurance for people with low income while Medicare was established specifically for Americans who were 65 years of age or older as well as those with specific disabilities.

The world and healthcare have changed a lot in the intervening half century, but the purpose of both insurance plans remains the same.

Some of the recent advancements in health insurance options, life expectancy and retirement savings strategies have resulted in significant changes to the Medicare system in particular.

When people refer to “Original Medicare”, they’re specifically talking about Medicare Part A and Medicare Part B. Those aspects of Medicare, including hospital insurance and medical insurance, are relatively unchanged in many respects.

Medicare Part C (Medicare Advantage) and Medicare Part D are much more recent additions. Medicare Advantage was rolled out in 1997 with the Balanced Budget Act to give retirees the option to take advantage of all the benefits of Part A and Part B plus a variety of coverages that weren’t initially included, like dental, vision and hearing insurance. Part C plans are written by private insurers.

Medicare Part D came nearly a decade later with the Medicare Prescription Drug, Improvement, and Modernization Act. Eligible recipients can enroll in standalone Part D coverage or a private Medicare Part C policy with all four parts rolled into one.

The Medicaid landscape is much more complex because the programs are administered by individual states and require complex means testing. Although the program is technically in partnership with the federal government, states have significant leeway in terms of the benefits they offer enrollees and the way in which they administer their programs.

Arizona, like many states, does offer some unique options for duel eligible retirees, most notably the 

People who are entitled to Medicare Part A, enrolled in Medicare Part B and receive Arizona Medicaid benefits through the Arizona Health Care Cost Containment System (AHCCCS) are eligible for coordinated – or “aligned” – Medicaid and Medicare coverage.

 on the AHCCCS website to find the most up to date reference table for plans available in each county.

Retirees and people planning for retirement in Arizona are faced with many choices that have significant, long-term ramifications. Your choice of healthcare will likely be one of your most important decisions.

There often is a preferred plan for every retiree or couple, but which is best is highly dependent on your resources, unique care requirements and risks.

An unavoidable limitation inherent with Medicaid of any type is the narrower network of healthcare providers and specialists. Many doctors and hospitals don’t accept Medicaid, which means your options may be limited. While people on Medicaid can usually find specialists to meet their needs, the limited number of doctors may result in long wait times for appointments. Those with Medicare Advantage Plans typically have much broader access to local services and specialists.

With D-SNP, some retirees do have access to more comprehensive care than they may otherwise receive on Medicaid alone, but many of the same limitations can apply.

There are many Medicare Advantage Plans that include wellness programs and perks that retirees won’t find with Medicaid. These types of benefits, if they’re taken advantage of, can have a positive, life-enhancing impact on seniors.

Are You Financially Prepared for Retirement?

While many seniors are relieved to learn about their Medicaid options and plans like D-SNP, most would prefer to avoid that necessity. At Fullerton Financial Planning, we strive to ensure every client has the resources they need to pursue the comfortable life they desire in retirement. A big part of that is having easy access to exceptional local physicians and facilities.

If you have questions about Medicare Advantage Plans or which providers may be right for you, our 

 and health insurance to estate planning.

 Learn more about your options by calling our advisers at 

Welcome to Our Financial Tips Blog

Is Your 401(k) Protected in Bankruptcy?

How to Reduce My Taxes and Maximize My Tax Deductions

Calculating Taxes on Social Security Benefits

Which Assets Should or Should Not Be in a Trust?

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Why You Should Look at Optimizing Your Portfolio for 2024

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What Is Not Covered by Medicare?

What Are the Differences Between Medicaid and Medicare?

Am I Allowed to Have Other Insurance While on Medicare?

Who Is Usually Eligible for Medicare?

What Exactly Is Medicare?