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The LynnLeigh JournalA single person age 65 in 2023 may need about $157,500 saved after taxes tocover health care expenses in retirement, according to Fidelity. In 2023, theirestimate for an average retired couple aged 65 is around $315,000.The actual amount you’ll need will depend on many variables, including whereyou live during retirement, your health, and how long you may live.Remember, Fidelity’s numbers are just an average. Some folks will spend more,and some will spend less.The good news is that costs are expected to stay the same compared to 2022.The bad news: it’s almost double the 2002 estimate.Fidelity bases its example on those who take part in traditional Medicare. If youhave yet to retire, do not assume that Medicare is a panacea for all health carecosts. Many younger folks believe that Medicare covers all expenses. It doesn’t.While coverage is broad, it does not take care of everything.TACKLING RETIREMENTHEALTH CARE ISSUESBy Kelly L. Olczak, CFP® Tackling RetirementHealth Care IssuesMedicare BasicsPlanning smart forhealth care inretirementNewsletter HighlightsS E P T E M E R 2 0 2 3Brief Market UpdateIt’s never a straightline... Final ThoughtsShameless plug...

health insurance sold by private insurance companies that help plug “gaps” in traditional Medicare. Medigap policies helppay for some health care costs that original Medicare doesn’t cover.You may go to any doctor that accepts traditionalMedicare insurance.The premium varies for Part D, which covers prescription drugs. Beginning in 2025, out-of-pocket costs for prescriptiondrugs will be capped at $2,000 a year.Medicare Part C is growing increasingly popular. Also known as a Medicare Advantage Plan, Medicare Part C wraps Parts Aand B into a single plan.Many offer vision, hearing, dental, and health and wellness programs. Most include Medicare Part D.Private health insurance companies offer Medicare Advantage plans. They must follow rules set by Medicare. But much likean HMO or PPO, you’ll be funneled into in-network doctors or your out-of-pocket costs will be much higher.However, since 2011, federal regulations for Medicare Advantage have mandated out-of-pocket limits for Parts A and B. Incontrast, traditional Medicare has no out-of-pocket limit for covered services—hence the need for a Medigap policy.In 2023, the out-of-pocket limit for Medicare Advantage plans may not exceed $8,300 for in-network services and $12,450for in-network and out-of-network services combined.Let’s take a brief look at Medicare. Medicare Part A covers treatment in ahospital. It’s free for most folks.The premium for Medicare Part B,which covers doctor visits and labtests, is currently $165 a month (ormore, depending on your income).There’s usually a 20% cost share whenyou receive treatment.Many who enroll in traditionalMedicare purchase what’s called aMedigap policy. A Medigap policy is S E P E M B E R 2 0 2 3T H E L Y N N L E I G H J O U R N A LMEDICARE BASICSP A G E 2

With this brief review in mind, let’slook at several ways you can positionyourself favorably as you approachretirement.S E P E M B E R 2 0 2 3PLANNING SMART FOR HEALTH CARE IN RETIREMENTOBTAIN THE CORRECTMEDICARE PLAN THAT BESTSUITES YOUR NEEDSThe information we provided above isa broad outline. The insurance youobtain during retirement will dependon costs, your health and yourindividual circumstances.If you decide that Medicare Advantage is the right choice for you, you will want a plan that includes your doctors andmedications to avoid higher out-of-network costs.If you have additional questions, we would be happy to point you in the right direction.TAKE ADVANTAGE OF HEALTH SAVINGS ACCOUNTSYou may use your HSA to pay certain Medicare expenses, including premiums for Part B and Part D prescriptiondrug coverage.Your HSA can be used to cover part of the cost of a tax-qualified long-term care insurance policy.Your HSA is a retirement savings account, too. In other words, an HSA becomes a viable tool that can be used tosave for retirement as well as a savings account for health care expenses.You must have a high-deductible plan, but you may contribute up to $3,850 pretax to a Health Savings Account (HSA)as a single person and up to $7,750 if you have family coverage.Much like an IRA, capital gains and earnings in an HSA are sheltered from taxes. Moreover, you may withdraw from anHSA and pay no taxes if the funds are used for qualified medical expenses. Other HSA advantages:For example, let’s say you are 68 years old and withdraw $1,000 from your traditional IRA to pay for qualified medicalexpenses. You’ll pay federal and state income taxes on that withdrawal. If you pull $1,000 from an HSA for the same T H E L Y N N L E I G H J O U R N A LP A G E 3

expenses, you won’t pay any taxes.Consider maxing out your IRA andHSA if possible. If you can’t max outboth, consider placing some of yourretirement savings into an HSA.S E P E M B E R 2 0 2 3PLAN FOR LONG TERM CARELong-term care is a difficult topicmany would rather avoid. A personturning 65 has about a 70% chance ofneeding long-term care at some point,according to the Department ofHealth and Human Services. Medicare covers skilled home healthcare if it’s required.However, coverage for skilled nursing home care is limited. Medicare pays for the first 20 days in a nursing home. You’llpay a $200/day co-payment for days 21 to 100. After day 100, you’ll be responsible for 100% of the cost.You may consider a long-term care policy, which can be quite expensive.To address this potential obstacle, you may look at hybrid insurance, which is a combination of permanent life with along-term care rider. Another option is self-insurance, where you set aside funds that may be used for long-term care.Assessing your situation is the most important factor in determining the correct approach to health care. It’s a complexissue. It sometimes feels as if you are untying a knot when you are planning for health care coverage.But there are solutions. This month’s newsletter serves as a guide that can help you untangle that knot. If you haveadditional questions, we’re happy to assist.BRIEF MARKET UPDATEIT’S NEVER A STRAIGHT LINELast year was a year most investors would like to forget. While the performance was underwhelming, let’s not forgetsome of the lessons learned.We recognized that a well-diversified portfolio of stocks appreciates over a long period. But we expect interruptionsalong the way.T H E L Y N N L E I G H J O U R N A LP A G E 4

Since 1909, there have only been four periods where the rolling 10-year annualized return of the S&P 500 Index hasbeen negative.Two occurred in the late 1930s, which coincided with the stock market collapse and the Great Depression, and twooccurred in the late 2000s, which coincided with the financial crisis and the Great Recession.Looking back 10 years prior to those periods, we arrive at the Roaring Twenties and a thriving stock market, and thestock market bubble of the late 1990s. In other words, stocks had gotten well ahead of the economic fundamentals,and an economic event forced a longer-term retrenchment.Here is one more statistic. Over the period in question, stocks averaged a 10% annual return. Despite their volatility,stocks still outperformed savings accounts, CDs, T-bills, and bonds over the long term.Last month, stocks took a breather. When markets are seemingly priced for perfection, any disappointment may leadto a pullback.Also, last month, Treasury yields began to move higher, with the 10-year Treasury yield hitting its highest level since2007, according to data from the St. Louis Federal Reserve.Concerns over China’s slow recovery from draconian covid lockdowns also created some jitters.Finally, August has historically been a weak month for stocks, per monthly S&P 500 data from the St. Louis FederalReserve.S E P E M B E R 2 0 2 3T H E L Y N N L E I G H J O U R N A LP A G E 5

Long-term performance is about time in the market, not timing the market.Your behavior plays an important role in long-term returns. How do you react when stocks soar or falter? Doeseuphoria lead you to become too aggressive? Does market weakness push you to get too conservative after equitieshave already faltered?What is the best approach to your financial plan? Your mix of stocks, bonds and cash (and any other diversified assetclass) plays a role. Much will depend on your appetite to take on risk.We’re not smart enough to time the stock market. Occasionally, we might make a lucky guess, but it’s not something wecan depend on. Even the most experienced traders could get lucky once in a while, but it’s impossible to predict the highsand lows of the stock market consistently.Few saw a bear market last year, and few expected the stock market to rally as it has done this year. In fact, manyexpected the economy to be in a recession by now, which would likely have created another impediment to stock marketprogress. We’re still waiting for that recession.That said, control what you can control.We can’t and you can’t control shorter-term returns. That’s out of our sphere of influence.But there are aspects of investing that we can control.It’s why we consistently emphasize your financial plan and your long-term goals.The plan isn’t etched in stone. It is flexible. When life brings about changes, we can make adjustments. But we encourageadjustments in the variables you can control.I trust you have found this review to be informative. If you have any inquiries or wish to discuss any concerns, please don’thesitate to contact me or any member of my team.As always, it’s a privilege and a humbling experience to know that you have chosen us as your financial advisor. Thank youfor the trust you have placed in us.S E P E M B E R 2 0 2 3FINAL THOUGHTSIt is important to understand the costs associated with retirement health care expenses and how Medicare can assist you.Planning for these expenses is vital, as it may help reduce out-of-pocket costs and put you in a better financial situationduring retirement. Whether you’re just getting started or have already begun planning, understanding Medicare and the P A G E 6T H E L Y N N L E I G H J O U R N A L

various options available can help ensure that your retirement is secure and comfortable. With the right knowledge, youcan ensure that you have access to the best possible health care in your golden years. Doing so can help make sure you’reprepared for the future and can live life to its fullest in retirement. If you are not a client of ours, let me just say - we are pretty good at this sort of planning. Let Us Help You Plan forRetirement Healthcare Expenses. Seriously, give me a call. I would be happy to provide you with some free advice, yes,free advice. I would be delighted to help you get started!Thank you for reading! Stay healthy and safe. S E P E M B E R 2 0 2 3P A G E 7T H E L Y N N L E I G H J O U R N A LLynnLeigh & Company - A Registered Investment AdvisorThis information is provided by LynnLeigh & Co. for general information and educational purposes based upon publicly available information from sourcesbelieved to be reliable – LynnLeigh & Co. advisors cannot assure the accuracy or completeness of these materials. The information presented here is not specific toany individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by ataxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his orher individual circumstances. The information in these materials may change at any time and without notice. Past performance is not a guarantee of futurereturns.