Working Beyond 65

What's Inside Your Targeted Retirement Fund

The Boat Isn’t Going Back

People will increasingly work beyond 65 years old, and that trend isn’t going to reverse (that’s about the extent of my crystal ball reading). The list of reasons is too long to detail here, and not really the point of Jae’s Corner. The issue is that it is creating enormous issue with respect to Medicare enrollment.

Most of our professional time is not on those that are already retired and turning 65, but on those who are working and turning as they approach 65 years old. Almost no private people fully understand, even those that approach us after doing their own research, or have read my favorite book, which ‘just happens to be’ now available in ebook format [link], need a private explanation.

There is good reason for the private explanation, it is very nuanced, and cannot be fully flushed out in a book. There are follow-up questions that people to make 3x sure they understand correctly. We frequently field questions from insurance professionals who are mistaken.

Broadly Speaking

Part A is a good idea when you turn 65. The main exception is that if a person has an HSA account and is contributing to it (you or anyone else).

Part B is much more subtle.

• Size of employer (20 FT employees is the cutoff) matters a lot because the entire pricing and employer contribution amounts can be wildly different, broadly described by the difference in employer size.

• Price matters, different employers charge different premiums for participation in an employer-sponsored plan. This applies to all employer sizes.

• The timing of when you want to begin Part B is complicated. The application process of attempting to name when you want Part B to be effective is also complicated. To make it much worse, other editions here have explained that delays and errors at the SSA are making it more unsettling. This has been the topics of many articles here.

• The decision here sits with the other, non-Medicare-eligible family members in the household. Is there an alternative (yes there will be). Is that alternative viable at that price/benefits combination? Ah.

Part D is not troublesome

• Most employer-sponsored plans do count as “Creditable Coverage” i.e. they largely meet the CMS criteria.

• All ACA-compliant plans will be no problem.

• VA and FEHB will be no problem.

Targeted Retirement Funds: Under The Hood

It’s not the fact that financial markets are not off to a good start. Markets struggling is not surprising, the fact that it is happening at this time of the year is surprising, because there are large inflows that ‘should’ve’ been supportive. Because of this, the professional market is frowning a bit.

For everyday people, the questions are “what risks do I have?” and “Does this affect my financial roadmap?”

First, some year-to-date results.

This is a very typical subset of Targeted Retirement Funds offered in 401(k) plans. These prices are as of the close, 02/08/2022.

Underneath the hood is a systematic process, broadly described here, and so the explanation below is an extreme simplification, because it only illustrates two asset classes, which we know to be untrue. However, these are the dominant bencharks (S&P 500 Index, Bond Market Index).