Seniors

March 30, 2015March 16, 2015

What to Know Before You Downsize Your Home

When you picture the home where you’ll spend your retirement, what do you see? For many, the answer is a small bungalow near the beach, a spiffy little condo in the mountains, or a tiny, maintenance-free townhome near their grandchildren. But not all share this dream.

A recent study by Merrill Lynch found nearly 33 percent of Baby Boomers buy bigger homes when they retire. They aren’t interested in downsizing; rather, they want a larger property where scattered family can gather for holidays, or spare rooms for boomerang children. Fifty-one percent choose the reduce-and-simplify route, moving into smaller dwellings to achieve greater financial freedom (64 percent) or fewer maintenance requirements (44 percent).

If you’re among the latter—and considering downsizing—there are a few things financial and real estate experts suggest you determine before you proceed.

1. Know what you want.

The answer to this question isn’t all dollars and cents. In fact, the decision to downsize (or not) is often more about quality of life than it is about money. Talk to your partner about what really matters to both of you at this stage in your lives. Do you want to live closer to your family? Do you long to be part of a senior-focused community? Will less space prevent you from entertaining, practicing your hobbies or participating in other favorite free-time pursuits?

2. Know what your current home is worth.

How much can you actually get for it in today’s real estate market? Numerous surveys have shown that homeowners typically overestimate the value of their property by 10 to 20 percent. Request a competitive market analysis (CMA) from a Realtor familiar with your area. This report will show you the sales price of comparable homes in your neighborhood. You might also consider hiring an appraiser.

3. Know what a new home will cost you.

Real estate markets are improving around the nation. While this means your current property might be worth more than it was a few years ago, it also means that you’re unlikely to find a rock bottom deal on a new place. Once you’ve determined what you need (number of bedrooms, bathrooms, square footage, etc.) and where you’d like to live (such as a preferred neighborhood or metropolitan area), work with a Realtor to get an idea of what such a property is likely to cost you.

4. Know how much you’ll save.

Whether you’ve always wanted to downsize or are now feeling financially pressured to do so, figure out how much a move will actually save you. A smaller, less expensive home should have lower property taxes. And moving from a single-family property to a condo or townhome can certainly reduce your maintenance and utility costs. However, moving from the suburbs to the city usually means an increase in cost of living. Consider all the variables before making a decision.

Downsizing your home—especially if you’re able to net a nice profit in the process—can be a great way to supplement your retirement savings. However, it’s not the only option. Talk to your financial planner about alternative ways to tap into home equity and reach your retirement goals.

March 19, 2015March 16, 2015

Annuities for Retirement: How do Annuities Work?

Some people say that annuities are not good investment plans because of their high expenses. On average, an immediate annuity owner must pay 2%-3% annual fees, including insurance, management, and other recurring fees. This amount is considered a huge bite compared to other investment options.

While annuities require high fees, they are good retirement investment options. Annuities for retirement guarantee a stable source of income to the annuitants after their retirement.

What are Annuities?

Annuities are basically insurance products and also retirement investment options. They provide payments that could last for as long as the annuity owners live.

Although annuities are created by insurance companies, most of them are actually purchased from insurance brokers, financial advisers, financial planners, or even from banks. Furthermore, most of these sellers ask for commissions, which may amount to as much as 10 percent. This is one reason some people do not like annuities.

Nevertheless, some investment companies that sell annuities for retirement do not charge commissions. These are known as direct-sold annuities. These firms include companies associated with Vanguard, Fidelity, Ameritas Lite, T. Rowe Price, Schwab and TIAA-CREF.

These companies also do not ask for surrender charges. A 7% surrender charge may be required when an annuity owner changes his mind and returns the purchased annuity a year after the purchase. A decrement of 1 percent is deducted to the charge every passing year (e.g. 1 year, 7%; 2 years, 6%; etc.)

(Talk with your financial advisor about all of the options available and review the value and costs of what they offer from the viewpoint of total value you’ll receive over the life of owning that financial product.)

The amount of payment one receives from an annuity depends on the length of the payment period. The shorter the payment period, the larger the payment returns. Owners of annuities for retirement can choose the length of the payment period. It could be either a payment for a limited number of years, or a payment for the rest of the owner’s life.

Types of Payments and How Annuities Generate Income

Basically, there are two types of payments that owners receive from annuities for retirement: fixed and variable. These types of payments are related to the investment option an annuity offers.

In simpler terms, buying an annuity is as if you had given your money to an institution without expecting to receive back the same total amount. The institution, in turn, promised to give you an income return monthly, quarterly, annually, or in one sum.

The institution will invest your money to a subaccount (usually a mutual fund). Your money might be invested in stocks, real estate, etc. In this way, your money will generate steady retirement income and continue to grow.

In variable payment, the annuity owner can choose how his money be invested. The amount of payment or the future value of his annuity depends on the performance of his chosen fund. The growth of the money through investment is tax-deferred. This is the great advantage of annuities for retirement. In addition, when the time to receive the payments comes, an annuity owner will only be taxed based on regular income tax rate. Nevertheless, if the performance of his chosen fund is poor, the annuity owner may receive less payment.

In fixed payment, as its name implies, the annuity owner receives a fixed amount regardless of any circumstances. But the owner cannot choose an investment option. It is the responsibility of the institution to choose what investment option would generate greater investment returns.

Payout Options

Owners of annuities for retirement can choose among four payout options. The first option is Payment for Guaranteed Period. It is a type of fixed payment for a limited period; say, $8,500 annually for 10 years. If an annuity owner dies before the stipulated period expires, a beneficiary will continue receiving the payment.

The second option is Lifetime Payment. The annuity owner will receive payments as long as they live and ends when they pass away. No beneficiary is involved in this option. The payment can be fixed or variable. The amount of payment an owner receives is calculated based on the money invested and life expectancy of the owner.

The third option is Life with Period Certain. This is a combination of the first two options. The annuity owner will receive payments as long as they live and when they die, a beneficiary will continue receiving the payments for a limited period set by the annuity owner when they were alive.

Joint and Survival Annuity is the last payout option. The annuity owner will receive payments as long as they live. When they pass away d, their beneficiary, typically the spouse, will continue receiving payments for the rest of his/her life.

Annuities for retirement are complicated. To avoid a wrong decision, it is best to contact your trusted financial advisor for assistance regarding annuities.

February 19, 2015February 17, 2015

Should You Consider a Phased Retirement?

If you’ve ever dived head first into freezing water or jumped into a hot spring, you know that extremes in temperature can cause a shock to the system. Sometimes it’s best to just ease in bit by bit if you want to remain as comfortable as possible. The same can be said about retirement. According to a survey conducted by the Transamerica Center for Retirement Studies, 64 percent of workers would like to enter their golden years in stages, slowly making the transition from full-time to part-time employment before collecting their final paycheck. If this type of opportunity appeals to you as well, consider the following questions and answers.

What are the benefits of a phased retirement?

Because phased retirement programs allow you to gradually reduce the hours you are working, they ease the transition between paycheck and no paycheck as well as work time and free time. This allows you to determine if you’re actually going to enjoy life without a job. It also allows you to test out a lower-income budget. And you get to do it all while still maintaining your social ties at the office.

Ultimately, phased retirement will keep you in the workforce longer. It may enable you to postpone tapping into your retirement savings or drawing Social Security. This decreases your chances of outliving your money.

Will my employer give me this option?

According to the Society for Human Resource Management, only 13 percent of U.S. businesses offer a phased retirement option. In 2014, 4 percent were formal programs, while 9 percent were informal opportunities.

The government recently implemented a phased retirement program for federal employees. Eligible federal workers began submitting applications for the program last fall. They are allowed to work 20 hours per week at their normal hourly pay rate as well as draw half of their retirement annuity. If they choose phased retirement, they must set aside at least 20 percent of their work week for mentoring other employees.

If the government’s program is successful, it is possible additional employers will follow suit. Many already fear losing large numbers of Baby Boomer workers without enough adequately trained replacements standing by. In fact, a 2011 survey of human resource directors conducted by the AARP found that 65 percent want to keep older workers on as part-time staff or consultants. They’re also very interested in developing knowledge transfer and mentorship programs (53 percent).

What else do I need to know?

Depending on your situation, a phased retirement could come with financial consequences in addition to a gradually decreasing paycheck. For example, if you have a pension, future benefits may be tied to your salary. You’ll need to find out how payments are calculated under your plan and if working fewer hours will reduce your payout.

Health insurance could also become an issue. If you enter phased retirement before you turn 65, you’ll be ineligible for Medicare. Unless your employer chooses to allow you to continue your work healthcare policy, you’ll have to obtain coverage some other way.

While using a phased retirement program to work longer and postpone dipping into savings may be a wise move, it doesn’t eliminate the need for careful financial planning. Whether you’re interested in a phased or traditional retirement, we are here to help. Please don’t hesitate to contact us with any retirement planning questions you have.

February 5, 2015February 4, 2015

You Can Now Track Your Social Security Benefits Online

Most seniors know a great deal about Social Security. After all, according to the Social Security Administration, these benefits make up about 38 percent of the average retiree’s income. Many retirees actually receive more than 50 percent of their income from Social Security, so it makes sense to stay up to date on related news and possible future changes to the program. However, here’s something you may not already know: since 2012, it has been possible to track your Social Security benefits online.

Of course, you have to sign up first.

Visit the “my Social Security” sign up page at www.socialsecurity.gov/myaccount to create your personal account. In addition to your name, Social Security number and address, you’ll need to provide the correct answer to a few personal questions based on the financial information in your Experian credit report. Questions range from the amount of your mortgage payment to when you took out your last auto loan. Correct answers allow the site to confirm your identity.

It’s easier than it sounds. The most time consuming part of setting up your new account is likely to be finding a user name that is not already in use and selecting the “password change” questions. Once your account is active you can view estimated benefits and your earnings record. Or, if you’re already collecting benefits, you can review payments and change your bank information for direct deposit.

There are a few things you cannot do online.

If you spot a mistake in your earnings record, you cannot correct it online. Instead, you’ll have to call the Social Security Administration to report the error. Additionally, if you’re interested in the Supplemental Security Income program that covers disabled adults and children with limited income and resources, you will need to schedule an appointment at your local agency office.

The online system also does not include any features for reporting stolen Social Security cards, requesting replacement cards, or changing the name on your card due to marriage or divorce. That must be done the old fashioned way with a call to the Social Security Administration.

Tracking your Social Security benefits is an important step in retirement planning.

To qualify for Social Security benefits, you earn “credits” for each year you work. Most people need to earn 40 credits over their working lifetime to receive benefits. If you have earned enough credits, the Social Security Administration can estimate your future benefits based on your average earnings. Generally, the older you are—and the closer you are to retirement—the more accurate this estimate will be.

The estimate includes how much you can expect to receive if you retire at early retirement age (62), full retirement age (currently 67) or age 70. You can use this information to determine the amount of other income you’ll need to generate—from savings and investments—for a comfortable post-retirement life.

If you’d like assistance reviewing your Social Security benefits information and planning your retirement investments, I’m here to help. Please don’t hesitate to contact me with questions on this or any other financial planning topic.

January 27, 2015February 4, 2015

Surprising Secrets of Successful Retirees

Whether you’re in your 30s, 40s or even your 50s, you’re probably curious about what it takes to enjoy a successful retirement. Fortunately, the professionals at MoneyTips.com, an online community and financial planning resource, believe they have discovered the answers you crave. They recently surveyed more than 500 Americans to learn what the most successful did to prepare for their golden years and how they’re enjoying their retirement. Some of the secrets uncovered are quite surprising.

First off, the most “successful” retirees might not look like you’d expect.

While four out of five are between the ages of 60 and 79 and now fully retired, only 42 percent of successful retirees are women. This is a bit surprising given that women traditionally live longer than men do. Also somewhat surprising is the financial profile of those who are living comfortably in retirement. According to the survey results, 44 percent have less than $500,000 in assets. Sixty-seven percent live on less than $100,000 per year, and 27 percent live on less than $50,000. Eight-five percent rely on social security for a portion of their retirement income.

While they consider their retirement “successful,” they still have a few money concerns.

Almost have of the survey respondents reported that worries about money still cause them stress, even though they feel their retirement lifestyle is comfortable. The most common concerns are outliving their savings (25 percent), incurring substantial healthcare costs (24 percent), and maintaining their standard of living (23 percent). Fewer worry about leaving an estate to their family (5 percent) or funding their children or grandchildren’s educations (7 percent).

They’ve found numerous ways to minimize their risks of running out of money.

Proactive frugality is a common trait of the successfully retired. The survey results show 55 percent drive cars that are at least two years old. Forty-four percent spend less than their monthly income. Thirty-six percent have reduced their living expense, and 35 percent have cut back on luxury extras. That said, only 20 percent report sticking to a carefully planned budget.

They also make smart insurance and income moves. Seventy-three percent of successful retirees report carrying Medicare insurance and 24 percent have invested in long-term care insurance policies. Seventeen percent have continued to work (or their spouse has done so). Ten percent collect income from rental properties.

They had a plan for retirement.

Among survey respondents, nearly 65 percent calculated how much they’d need to retire sometime between their 20s and their 60s. However, more than 50 percent didn’t start saving until they were in their 40s. At that point, 12 percent saved between 1 to 5 percent of their income, 34 percent saved between 6 and 10 percent, 22 percent saved between 11 and 20 percent, and 8 percent saved 21 percent or more.

When it came to investing those savings, 62 percent of successful retirees consulted professionals at least some of the time. However, 44 percent report primarily making their own investment decisions. Sixty-six percent chose traditional IRAs, while 27 percent utilized Roth IRAs. The popular 401(k) was part of the investment portfolio of 53 percent of successful retirees. Other common investment vehicles were defined benefit plans (30 percent), tax sheltered annuities (25 percent), SEP IRAs (18 percent), rental properties (17 percent) and health savings accounts (12 percent).

Would you like to join the ranks of successful retirees? If so, we can help. Contact us anytime you need financial planning or investment assistance.

January 16, 2015February 4, 2015

Real Estate Mistakes Retirees Make

As you approach retirement, real estate may be one of the biggest assets you have. Unfortunately, it’s also an area in which many retirees make mistakes. Consider the following common errors—from belated downsizing to carrying a mortgage—as well as how to avoid them.

Delaying Downsizing

The larger your home, the higher your energy bills and—very likely—the more substantial your property taxes and homeowner’s insurance premiums. Postpone downsizing into a smaller property and you’ll pay these costs longer, missing out on potential savings. As soon as your children are out of the home—even if only to go to college—it’s time to reevaluate how much room you actually need.

Squandering Downsizing Proceeds

If trade your home for a smaller property and are able to walk away with cash on closing day, invest rather than spend your windfall. Depending on your individual circumstances, this may mean living off the equity in order to postpone drawing social security or touching your other retirement funds. It could also mean using the equity to max out your IRA and/or 401(k) contributions. Your financial advisor can help you analyze your options and their associated tax implications.

Relocating Without Researching

Not only do you need to consider the cost of living and recreational benefits offered by any new location, but you should also look into part-time employment opportunities and available healthcare. Many retirees choose to go back to work to supplement income and relieve boredom, so you don’t want to choose a location where this won’t be an option. Nor do you want to relocate to an area lacking doctors or hospitals within your insurance network.

Owning More Than One Home

If you love the idea of spending your winters in a warmer climate but don’t want to make a permanent move, purchasing a home in a second location can be tempting. However, it’s important to remember that maintaining two properties is always a drain on finances. Consider renting a condo or other abode in the location where you’ll spend the least amount of time instead. If you must own a second property, rent it to vacationers when you’re not using it yourself to defray some of the costs.

Carrying a Mortgage In Retirement

Sure, mortgage rates are currently near historic lows, and you can deduct the interest paid each year when you file your income taxes. But if you’re going to be living on Social Security, IRA distributions and other investments, that deduction may not be very significant. Additionally, if you take the money you might have paid into a mortgage and use it to cover other expenses, you could possibly delay drawing on Social Security until you reach full retirement age—leading to larger distributions. If you’re nearing retirement, consult your financial planner before you refinance your home loan or use one to buy a new property.

December 8, 2014February 4, 2015

The Biggest Retirement Surprises

Life begins at retirement—or so the greeting cards regularly proclaim. However, though many have spent years planning for this transition from career to leisure, retirees still encounter the unexpected. Consider these surprises many consider among the biggest in retirement.

Surprise: You may not enjoy all that spare time.

Sure, many retirees look forward to having more time to do the things they find fun once they no longer have to satisfy work obligations. And daily golf games, weeks visiting with the grandkids and afternoon naps can certainly be enjoyable. But that may not last forever. Some retirees find that they miss the structure of the office, the social connections they had at work, and the sense of purpose that comes with a job. If this happens to you, a part time position or volunteer opportunity is one way to recoup some of what you’ve lost.

Surprise: You may want a break from your spouse.

No matter how well you got along during the previous years of your partnership, spending too much time together post-retirement can lead to arguments, disagreements and frazzled nerves. Don’t hesitate to ask for the space you need. Honesty in this regard can actually strengthen your evolving relationship. Bonus: doing a few things alone (like the part time job or volunteer work mentioned earlier) will give you exciting new topics to discuss when you’re together.

Surprise: You may need a different home.

You may now have all the time in the world for yard work and other home maintenance, but if you no longer enjoy it or it has become too difficult, you might find yourself considering other options. The same goes for single retirees who find themselves lonely without the daily social interaction they previously enjoyed at work. Downsizing into a smaller home, or a move into a retirement community, townhouse or apartment are all viable options you may wish to contemplate.

Surprise: You may still worry about money.

Even with nest eggs that should last several decades, many retirees find they worry about money and are reluctant to spend it. It’s an easy predicament to understand in today’s uncertain economy. However, you shouldn’t let extreme frugality prevent you from investing in the things you really need in retirement such as adequate medical coverage and maintaining your life and long-term care insurance policies.

Surprise: Healthcare may cost more than you expected.

Too many retirees underestimate how much their out of pocket healthcare costs will be post-retirement and are unpleasantly surprised as a result. According to RetiredBrains.com, these costs after Medicare eligibility average $276,000 during a couple’s lifetime. In one survey by the website, 50 percent of couples surveyed estimated that those costs would be less than $25,000.

Whether you’re 30, 50, or have already retired, I’d like to help you make the most of your golden years. Give me a call today to discuss ways to plan for these (and other) common retirement surprises.

November 28, 2014February 4, 2015

Taming Retirement Healthcare Costs

Our retirement years are supposed to be the best years of our lives, a time when we can slow down, relax and enjoy everything we’ve worked so hard to achieve. Unfortunately, large expenses can quickly tarnish what we believed to be golden—if we’re unprepared for them. For example, according to Fidelity Investments, a couple retiring this year will need $220,000 in today’s dollars just to cover the cost of their post-retirement healthcare needs.

While that figure is unchanged from last year, factoring potential healthcare expenses into your retirement plan is critical. Fortunately, there are steps you can take to tame those costs.

Get to know your health insurance options.

If you want to control your healthcare expenditures, you need to understand your health insurance options once you retire. Few of today’s firms offer their previous employees retirement healthcare coverage—so you’ll likely need to strike out on your own. This means the government’s Medicare health insurance program will probably be your primary source of coverage. In most cases, you’ll qualify for basic Medicare hospital insurance (also known as Part A), once you turn 65. Provided you paid Medicare taxes while working, Part A won’t cost you a dime.

Part B (also known as Medicare medical insurance) covers doctors’ services, outpatient hospital care, and is not free. You’ll pay a monthly premium for Part B—and there’s no annual limit on your out-of-pocket expenses. You can also choose a Medicare Advantage plan that combines Part A, Part B and additional supplemental coverage into a single healthcare policy. Privately managed, these plans often offer lower premiums or better benefits, though you may be required to use in-network providers.

Then you have to consider your prescription drugs. Retirees typically use a lot of them, and spending for prescriptions has increased 114 percent from 2000 to 2010 according to Fidelity Investments. You can purchase Medicare Part D for prescription drug coverage as a supplement to Part A and Part B or as part of a Medicare Advantage Plan.

Consider early or delayed retirement carefully.

Couples retiring at 62, before they become eligible for Medicare, spend an extra $17,000 per year on healthcare for a total of $271,000 during retirement. According to Fidelity Investments, the extra costs include health insurance premiums for the period prior to Medicare enrollment as well as estimated out-of-pocket costs during that time.

Delaying retirement, on the other hand, can save you money. Fidelity Investments found that couples who postpone retirement until the age of 67 can save about $10,000 per year. This reduces their estimated healthcare costs in retirement to $200,000.

Open a health savings account before you retire.

If your employer has adopted a high-deductible health plan (HDHP), you are eligible to open a health savings account (HSA). An HSA will allow you to pay for qualified medical expenses with pre-tax dollars. While many people utilize their HSA to pay for current expenses, you don’t need to use the money right away. You can actually save your HSA contributions and use them to pay for qualified medical expenses in retirement. Any withdrawals for that purpose are also federal tax-free.

Have you included possible future healthcare costs in your retirement plan? To discuss how much you may need and learn more about controlling post-retirement healthcare expenses, contact your financial planner or advisor today.

November 14, 2014February 4, 2015

Good Part-Time Jobs for Retirees

Hitting the beach, golf course or bingo hall 24/7 is no longer a golden years’ norm. According to survey sponsored by Merrill Lynch, 72 percent of pre-retirees want to keep working in retirement. And 47 percent of current retirees are either still working, have worked or plan to go back to work in retirement. Many do so to stay mentally active (62 percent), though other often cited reasons for continuing to punch the clock include staying physically active (46 percent), maintain social connections (42 percent), sense of self-worth (36 percent) and making money (31 percent).

For whatever reason, if you’d like to join the throngs of post-retirement employees, consider the following jobs that offer flexible hours, time for travel and more.

Blogger – If you love to write and are passionate about a topic that interests others, blogging could be an excellent post-retirement part-time job. Computer skills are must, including the use of WordPress or another blogging platform. An interest in learning about search engine optimization is also helpful, as you’ll need to use SEO tactics to drive traffic to your posts.

You won’t earn money just by writing blog posts. You’ll need to generate income streams by building a steady following and selling ad space on your page. You can also sell merchandise or affiliate products.

Bookkeeper – If you’re good with numbers, and have training or relevant experience in accounting, a part-time bookkeeping job may be your perfect post-retirement job option. Your hours may vary depending on your employer’s needs. If you work as a contractor, you may only need to put in a couple weeks each month to take care of invoicing and bill paying. Other potential duties include producing financial reports, collections and overseeing audits.

According to the Bureau of Labor Statistics, bookkeepers earn from $21,610 to more than $54,310 depending on qualifications, geographic location, employer, and hours worked.

Home-Care Aide – If you’re physically able to help elderly, ill or disabled individuals with their everyday activities, you might be able to find a post-retirement part-time job as a home-care aide. These professionals assist their clients with bathing and dressing, housework, grocery shopping, meal preparation and more. While some employers require a certification as a nursing assistant, you may be able to skip the middleman and find work directly with a needy client.

Hours vary, and pay, according to the Bureau of Labor Statistics, usually ranges from $7.91 to $13.34 per hour.

Medical Assistant – If you like the idea of working in healthcare but would prefer to stick to the administrative side of things, consider a post-retirement part-time job as a medical assistant. Duties typically include answering phones, scheduling appointments, checking in patients and verifying insurance. Some assistants even get the opportunity to assist doctors with medical records and procedures such as recording vital signs and collecting specimens.

Some employers conduct training on the job, though a certificate from a medical assistant program can be helpful. According to the Bureau of Labor Statistics, average pay is $14.12 per hour, though it may be higher or lower depending on your experience, geographic location and employer.

October 17, 2014February 4, 2015

EightWays to Reduce the Amount You Spend on Healthcare

Whether you’re living on a fixed income or not, trimming expenses is always a welcome option—especially when you can do so without sacrificing the quality of the goods or services you need. In the case of healthcare—a big expenditure for many seniors—implementing these easy tips to reduce the amount you spend can result in significant annual savings.

1. Pay cash in exchange for a discount.

Insurance paperwork processing costs practices money. Offer to pay cash for your exam or test and you may score a discount of 10 percent or more according to the AARP. Of course, you’ll need to make the payment immediately with cash or a personal check.

2. Use the emergency room for life-or-death emergencies only.

Urgent care facilities can treat less serious conditions—such as fractures, sprains, cuts and abrasions—for a fraction of what you’ll pay at the ER. Your wait time may be shorter as well.

3. Take advantage of free advice.

You can avoid many doctors’ office visits by calling a telephone help line staffed by nurses to have your questions answered instead. These trained professionals can advise you on at-home treatment options and will tell you if you need to go to the ER or make an appointment with your physician.

4. Buy generic medications.

Whether prescription or over-the-counter, generic medications are always less expensive than the brand name versions are. Fill your prescription at a big-box store such as Walmart or Target—which offer special generic medication programs—and you may be able to pay as little as $10 for a three-month supply.

5. Ask about a manufacturer’s “savings card.”

Whether the medication you need is unavailable as a generic or you’re allergic to the “filler” used in the generic version, you may still be able to save if the manufacturer offers a savings card program. Eligibility generally depends on your income and insurance, so talk to your pharmacist.

6. Shop around for your medications.

If you’re willing to drive across town or fill your prescription online, you may be able to save. Call several pharmacies and research the lowest price available for your particular medications. You can always ask your preferred pharmacist if he can meet or beat the price.

7. “Split” your pills.

It is possible to split some medications in half, doubling your number of doses for the same out-of-pocket cost. If your medication comes in an uncoated pill—and is not an extended-release drug—ask your doctor if she’ll prescribe double your recommended dosage so you can take half a pill each day.

8. Stay “in-network” whenever possible.

Whether you need to see a primary care physician, a geriatric specialist, have surgery or fill a prescription, a provider who is in-network works for fees your health insurer has pre-negotiated. Out-of-network providers can charge you whatever they want—and that often means as much as 20 percent more according to the AARP. Take particular care with elective surgeries. Physicians are not always aware of who is in- or out-of-network for your particular health insurance and may make a referral to the latter. Confirm the network status of any referred provider with your insurance company before scheduling a procedure.

If you’d like to review your health insurance policy or discuss additional ways to trim your healthcare costs, contact your insurance agent today.