• New Medicare Cards Are on the Way

    In the coming months, they will reach retiree mailboxes.

     

    Provided by MidAmerica Financial Resources

     

    New Medicare cards will be mailed out between now and next April. They have an 11-digit I.D. number instead of your SSN, and they are made of paper rather than plastic. This new 11-digit number is called the Medicare Beneficiary Identifier (MBI). If you have recently moved, be sure to provide the Social Security Administration with your new address so that your new card can reach you without delay. Once you get the new card, be sure to destroy the old one, and guard your MBI as you would guard your SSN.1,2

      

    As you await the new I.D. card, watch out for fraud. Ironically, this preventive measure against identity theft is motivating criminals, who see an opportunity to confuse and exploit seniors during the transition.

     

    Some Medicare recipients could fall prey to their actions. In a March AARP poll of Americans aged 65 and older, 76% of respondents said that they were unaware of (or uninformed about) the new I.D. cards. When asked if they believed Medicare would charge them a $25 processing fee to get their new I.D. card, 63% agreed or were unsure. Fifty-six percent of the respondents thought Medicare might call them and ask for their Social Security Number as a condition of issuing the new card.3

            

    The truth is that to get your new Medicare card, all you have to do is wait (and make sure that your mailing address is up to date). If someone calls you and tells you that you need to verify your Social Security Number with Medicare before you can get your new I.D. card, hang up. Medicare does not contact its enrollees by phone to demand personal information. In addition, ignore emails or calls that ask you to pay an activation fee to receive your new card. Claims that you can only obtain your card if you disclose certain financial information are also false.1

     

    Are you enrolled in a Medicare Advantage plan? If so, go ahead and keep using the I.D. card that the plan gave to you. A new Medicare card will be coming your way and you will want to retain it with your important papers, though you may not be using it with all providers.1

     

    The new cards will be mailed in stages to different regions of the country. You will be able to use your new Medicare card as soon as you receive it in the mail. Beginning January 1, 2020, you will need to use the MBI on your new Medicare I.D. card to submit a claim.4

     

    MidAmerica Financial Resources may be reached at 618.548.4777 or greg.malan@lpl.com www.mid-america.us

       

    This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

     

        Securities and advisory services offered through LPL Financial, a Registered Investment Adviser, Member FINRA/SIPC.
    MidAmerica Financial Resources and Malan Financial Group are separate and unrelated companies to LPL.

     

    Citations.

    1 - money.cnn.com/2018/04/09/news/economy/medicare-card-scam/index.html [4/9/18]

    2 - al.com/news/index.ssf/2018/04/medicare_delays_mailing_new_id.html [4/13/18]

    3 - aarp.org/research/topics/economics/info-2018/2018-medicare-scams.html [4/5/18]

    4 - cms.gov/Medicare/New-Medicare-Card [4/19/18]

     

  • Financing a College Education

    A primer for parents and grandparents.

     

    Provided by MidAmerica Financial Resources

     

    A university education can often require financing and assuming debt. If your student fills out the Free Application for Federal Student Aid (FAFSA) and does not qualify for a Pell Grant or other kinds of help, and has no scholarship offers, what do you do? You probably search for a student loan.

     

    A federal loan may make much more sense than a private loan. Federal student loans tend to offer kinder repayment terms and lower interest rates than private loans, so for many students, they are a clear first choice. The interest rate on a standard federal direct loan is 4.45%. Subsidized direct loans, which undergraduates who demonstrate financial need can arrange, have no interest so long as the student maintains at least half-time college enrollment.1,2

     

    Still, federal loans have borrowing limits, and those limits may seem too low. A freshman receiving financial support from parents may only borrow up to $5,500 via a federal student loan, and an undergrad getting no financial assistance may be lent a maximum of $57,500 before receiving a bachelor’s degree. (That ceiling falls to $23,000 for subsidized direct loans.) So, some families take out private loans as supplements to federal loans, even though it is hard to alter payment terms of private loans in a financial pinch.1,2

       

    You can use a student loan calculator to gauge what the monthly payments may be. There are dozens of them available online. A standard college loan has a 10-year repayment period, meaning 120 monthly payments. A 10-year, $30,000 federal direct loan with a 4% interest rate presents your student with a monthly payment of $304 and eventual total payments of $36,448 given interest. The same loan, at a 6% interest rate, leaves your student with a $333 monthly payment and total payments of $39,967. (The minimum monthly payment on a standard student loan, if you are wondering, is typically $50.)3

      

    When must your student start repaying the loan? Good question. Both federal and private student loans offer borrowers a 6-month grace period before the repayment phase begins. The grace period, however, does not necessarily start at graduation. If a student with a federal loan does not maintain at least half-time enrollment, the grace period for the loan will begin. (Perkins loans have a 9-month grace period; the grace period for Stafford loans resets once the student resumes half-time enrollment.) Grace periods on private loans begin once a student graduates or drops below half-time enrollment, with no reset permitted.4

     

    What if your student cannot pay the money back once the grace period ends? If you have a private student loan, you have a problem – and a very tough, and perhaps fruitless, negotiation ahead of you. If you have a federal student loan, you may have a chance to delay or lower those loan repayments.3

     

    An unemployed borrower can request deferment of federal student loan payments. A borrower can also request forbearance, a deferral due to financial emergencies or hardships. Interest keeps building up on the loan balance during a forbearance, though.1

     

    At the moment, federal student loans can be forgiven through two avenues. The first, the Public Service Loan Forgiveness (PLSF) program, requires at least 10 years of public service, government, or non-profit employment, or at least 120 student loan payments already made from the individual. The second avenue, income-driven repayment plans, first lowers the monthly payment and extends the payment timeline based on what the borrower earns. If the balance is finally forgiven, the loan forgiveness is seen by the Internal Revenue Service as taxable income. (If you have student loan debt forgiven via the PLSF, no taxes have to be paid on the amount.)1,3  

     

    Consult financial aid officers and high school guidance counselors before you borrow. Get to know them; request their knowledge and insight. They have helped other families through the process, and they are ready to try and help yours.

     

    Lastly, avoid draining the Bank of Mom & Dad. If your student needs to finance a college education, remember that this financial need should come second to your need to save for retirement. Your student has a chance to arrange a college loan; you do not have a chance to arrange a retirement loan.

       

    MidAmerica Financial Resources may be reached at 618.548.4777 or greg.malan@lpl.com www.mid-america.us

      

    This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

     

    Securities and advisory services offered through LPL Financial, a Registered Investment Adviser, Member FINRA/SIPC.
    MidAmerica Financial Resources and Malan Financial Group are separate and unrelated companies to LPL.

       

    Citations.

    1 - nbcnews.com/better/business/student-loan-debt-what-kids-their-parents-need-know-ncna865336 [4/12/18]

    2 - www2.cuny.edu/financial-aid/student-loans/federal-direct-loans/ [4/19/18]

    3 - credible.com/blog/refinance-student-loans/how-much-will-you-actually-pay-for-a-30k-student-loan/ [12/4/17]

    4 - discover.com/student-loans/repayment/student-loans-semester-off.html [8/3/17]