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2024 Medicare Trustee Report Released after National Debt hits $35 Trillion

by Eric Seyboldt 

The 2024 Medicare Trustees Report issues a pressing call that demands our attention. Medicare, essential for millions of Americans, faces a critical moment, with the future of healthcare for retirees and the disabled at stake. The report highlights looming financial challenges that could compromise the program's sustainability without swift and decisive action.

Medicare by the Numbers

The report provides a snapshot of Medicare’s evolving terrain:

• Enrollment Growth: Beneficiaries increased from 56.8 million in 2016 to 66.7 million in 2023, indicating rising demand for healthcare among the aging population.

• Rising Costs: Total costs surged from $678.7 billion in 2016 to $1.04 trillion in 2023, highlighting the escalating financial pressures on the program that will only continue to increase to over $2 trillion by 2033.

The Looming Threat to Medicare Part A

Projected to be depleted by 2036, the Hospital Insurance (HI) Trust Fund, which finances Medicare Part A, faces a stark future. Without legislative measures, Medicare will only cover 89% of its costs, creating a significant funding gap that jeopardizes this crucial healthcare safety net.

Navigating the Post-Pandemic Landscape

Although the COVID-19 pandemic has lessened, its effects continue to impact Medicare’s financial projections. The trustees have adjusted their projections in three key pandemic-related areas:

• Continued Morbidity Improvements: Long-term health impacts of the pandemic are factored in through 2029.

• Revised Spending Growth: Changes reflect the end of the 3-day stay waiver, affecting inpatient and Skilled Nursing Facility (SNF) spending growth.

• Home Health Spending: Increased annually by 2.9 percentage points from 2024 to 2026 due to ongoing staffing shortages.

The Rise of Medicare Advantage

Medicare Advantage (MA) is becoming increasingly popular, with 48.2% of beneficiaries choosing these private plans in 2023, projected to rise to 57.1% by 2032. This trend underscores a preference for MA plans' benefits and flexibility, but also raises concerns about the future of traditional Medicare.

The Impact of the Inflation Reduction Act

The Inflation Reduction Act (IRA) of 2022 is reshaping Medicare’s financial landscape. As usual, the increased government spending has resulted in an increase in inflation rather than the falsely marketed, bait and switch “inflation reduction”. Though Part D is expected to yield cost savings by the decade’s end, initial increases in benefits and reduced manufacturer rebates offset these gains. Specifically:

• Part A: The Act has opened benefits up to more recipients by allowing those who did not contribute to the Trust.

• Part B Drugs: Negotiated prices are set to significantly reduce government expenses, offering long-term fiscal relief.

• Part D Drugs: From 2027 to 2030, expanded benefits will boost expenditures, but cost savings are anticipated starting in 2031.

The Uncertain Future of Healthcare Technology

Advancements in healthcare technology bring both promise and uncertainty. While innovations can revolutionize treatment and care, they complicate cost projections. The trustees acknowledge that while past advancements have raised spending, future improvements could enhance efficiency and reduce costs—an appealing possibility amidst financial challenges.

A Call to Action

The Trustees’ warning is clear: without significant reforms, Medicare’s future is at risk. Two proposed paths to avoid disaster include:

• Increase Payroll Tax: Raising the tax from 2.90% to 3.25% could stabilize the HI Trust Fund.

• Reduce Expenses: An 8% reduction in expenses, down from 13% last year, shows progress but still poses challenges.

The trustees emphasize that while these measures are crucial, they come with difficulties. Immediate action is necessary, as the decisions made now will determine Medicare's future and the healthcare security of millions. The unfolding debate underscores that Medicare’s fate is a national urgency, with the stakes higher than ever.

Reach out to us for a complimentary, 10-minute consultation call. Let's explore together how we can help you choose the right Medicare plan, protect your assets, and convert assets from taxable to tax-free, to ensure your golden years are as fulfilling and worry-free as you’ve always imagined. Email Eric at [email protected] or give us a call today to schedule your consultation. Let's make your retirement dreams a reality!

The Rising Demand for Whiskey: A Smart Investor’s Choice

Why are 250,000 Vinovest customers investing in whiskey?

In a word - consumption.

Global alcohol consumption is on the rise, with projections hitting new peaks by 2028. Whiskey, in particular, is experiencing significant growth, with the number of US craft distilleries quadrupling in the past decade. Younger generations are moving from beer to cocktails, boosting whiskey's popularity.

That’s not all.

Whiskey's tangible nature, market resilience, and Vinovest’s strategic approach make whiskey a smart addition to any diversified portfolio.

Schedule a call with a Vinovest advisor to learn more.

by Eric Seyboldt

Client: I've been saving carefully for my retirement, but I keep hearing about "longevity risk." What does that mean, and how can prepare for it?

Eric: Longevity risk is an essential yet often overlooked part of retirement planning. It refers to the risk of outliving your savings. With advancements in healthcare, people are living longer than ever. While a longer is a great blessing, it poses a significant challenge: making sure your savings last as long as you do.

Client: How serious is this risk?

Eric: Consider this: a study by the Society of Actuaries indicates there is a 50% chance that one partner in a 65-year-old couple will live past 90. This means retirement savings might need to last 30 years or more! Take, for example, Susan and John, who retired at 65 with substantial savings. They planned for a lifespan of about 85 years, but both are now healthy at 88. Their initial withdrawal strategy, which seemed sensible, now looks risky. They illustrate longevity risk in real life.

Client: That sounds alarming! How can someone plan for such uncertainty?

Eric: Detailed planning and strategies to mitigate this risk are crucial. Here are some steps you can take:

• Diversify Your Income Streams: Relying only on savings isn't enough. Consider annuities for a steady lifetime income and potentially optimize Social Security benefits by delaying it until age 70.

• Adjust Your Withdrawal Rate: The 4% rule may not be suitable for everyone. Consider a more conservative rate, especially early in retirement, to preserve your assets.

• Invest for Growth: Include equities in your portfolio, even in retirement. Stocks, though risky, can provide growth to combat inflation and extend the life of your savings.

• Long-Term Care Planning: Healthcare costs can escalate as you age. Invest in long-term care insurance to protect your savings from these expenses.

• Plan for the Unexpected: Build a solid emergency fund and prepare for changes in health or the economy. Flexibility is vital.

Client: These strategies seem useful, but isn't it overwhelming to manage all this?

Eric: The simplest takeaway is to plan as if you'll live longer than expected. Be proactive. We’ll continue to regularly review and adapt your financial plan. Addressing longevity risk head-on provides peace of mind and financial security in your golden years.

Remember, retirement planning is more like a marathon than a sprint. Embrace the uncertainty of a long life as a chance to live well, fully prepared for whatever the future holds.

Retirement planning isn't just about hitting a financial target; it's about imagining a future where you can thrive without worries. Longevity is a blessing, and with the proper preparation, it can enrich every day of your extended life. Take action now, and let your retirement years truly sparkle.

Fixed annuities can be an essential component of a well-rounded retirement strategy, offering security, predictability, and efficiency in financial planning.

Here are current fixed annuity rates and their durations from Top A-rated carriers (subject to change at any time, not FDIC insured):

Rates Are Starting To Drop! Don’t Wait To Lock Them In!

3-year: 5.70% (under $100k Deposited)

3-year: 5.85% (over $100k Deposited)

5-year: 5.70% (under $100k Deposited)

5-year: 6.10% (over $100k Deposited)

Please feel free to email Eric at [email protected] if you’d like to ask any questions or request information on these fixed annuities or other retirement topics that are on your mind.

REAL ASSETS, Invest Like the Ultra-Wealthy 

National Debt Just Hit $35 Trillion and the US Dollar Has Less Value than Ever Before. Have You Called Us Yet to Explore Gold or Bourbon as an Addition to Your Portfolio?

With the current economic ups and downs, more and more savvy investors are turning to physical assets to protect their retirement funds. Physical gold and unconventional choices like barrels of bourbon are gaining tremendous popularity. These tangible investments, known as “Real Assets”, serve as a sturdy shield against the adverse effects of excessive money printing and inflation, while also providing excellent portfolio diversification during periods of stability.

Historically, tangible assets have consistently outperformed other investment types during economic recessions and volatility. They offer reliable protection against potential financial crises. Incorporating tangible assets into your investment portfolio can be both prudent and lucrative.

Given today’s economic instability, investing in Real Assets might be a wise approach to ensure the stability of your financial plans. Want to learn how these physical investments can enhance your portfolio? Let’s explore together and lay the groundwork for a secure and prosperous retirement!

Allocating funds into the asset class known as “Real Assets” may be a strategy that you should consider.

Ask us how to Rollover a portion of Your IRA or 401k To A BOURBON IRA (www.bourbon.fund/how-it-works/) or a GOLD IRA (see link below) and:

• Safeguard your assets from the collapsing dollar

• Incorporate the ‘REAL ASSET’ class into your portfolio like the ultra-wealthy

• Hedge against the current high-inflation conditions

• Protect your retirement assets against economic crises

Just get in touch. We make it easier than ever.

Feedback or Questions?

You’re invited to get in touch with us if you’d like to find out how the Novus Financial Group can help you on your journey to a happy, fulfilling life in Retirement. 

We have a lot of great information, as well as podcasts from our radio show ‘The Financial Insider’, and tools on our website - www.novusfg.com.

[email protected] www.novusfg.com [email protected]

Office: 614-943-2265

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Investment advisory services are offered by duly registered individuals on behalf of CreativeOne Wealth, LLC a Registered Investment Adviser. CreativeOne Wealth, LLC and Novus Financial Group are unaffiliated entities.

The content we provide here isn’t financial advice and cannot be taken as such. Please speak to your financial advisor before making any investment decision. Also, note that every investment comes with its risks and drawbacks. Lastly, we would like to remind you that past results cannot guarantee future returns.

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