There are three types of people in this world. There are "pessimists," there are "optimists," and there are "realists."
Which one are you?
I tend to be in the "realist" camp. I've come to the conclusion that there are things that I can control and things that I cannot control. If I stay focused on the things that I can control, I find that life just works out a whole lot better for me.
I think I can use a refill.
What You Should Know:
Congress has just passed something that they are calling "tax reform." I have to be honest with you, but I haven't spent a whole lot of time breaking this "tax reform" down into anything manageable.
By manageable, I mean that I haven't taken the time to see how the changes in the tax laws are going to affect me, one way or the other. That's why I have a CPA. It's his job to tell me how the tax bill affects me, one way or the other, and from everything I've been able to find out, 2018 is when this thing kicks in.
So, your taxes for 2017 are going to be whatever they are going to be and there isn't much you can do to change that. It's the "old" tax system, so it is what it is.
But, since the new law goes into effect for the 2018 tax year, you have time to explore the changes and see how they change your tax liability.
We can complain all we want about how the new tax bill favors the rich or hurts the poor and we can allow ourselves to become wrapped up in a controversy of one kind or another, that, quite frankly, you can't change.
So, it seems to me that there are three options. You can look at the tax changes as the best thing since sliced bread (optimist), the worst thing that has ever happened in the history of the world (pessimist), or "let's chill and see how this all shakes out" (realist).
The choice is up to you.
What I Know:
From what I've been able to gather, it would appear that regardless of how you are going to be affected by the tax change, there is one part of the legislation that is particularly interesting to me.
Now, I'm at an age where I use Medicare as my primary insurance vehicle. That means I have the A&B parts, and have added supplemental insurance policies to round out my coverage needs.
But, this one change to the tax code should be interesting to just about anyone who is hoping to retire at an age that is lower than the traditional retirement age, where Social Security and Medicare become options.
That change is the repeal of the insurance mandate that was part of the Affordable Care Act, the ACA.
Beginning in 2018, there will no longer be a tax penalty for anyone who chooses not to have medical insurance. Well, on the surface, not having medical insurance is just silly. But, the medical coverage that you were required to have under the ACA was just as silly.
Things To Think About:
The ACA required insurers to provide coverage for things that some of us didn't need as part of our coverage and, at the same time, it provided coverage of things that some of us do need.
But that paradigm becomes a conundrum when it is applied to the real world. If I am a younger person, in good health, perhaps all I need is a policy that covers a major catastrophe. I'm not going to the doctor on a regular basis, as a younger, healthy person, but if I'm involved in a car accident and I have to be in the hospital for a long period of time, I'd like to have some kind of coverage for that possible event.
If I'm a middle aged individual, then perhaps I need a policy that covers more than catastrophic events. I need to see the doctor maybe 4 times a year. Have a physical once a year. Have some prescription medicine coverage. But I might not need some things which were part of the ACA plan.
As an older guy (me), none of this private insurance stuff matters to me. I've got my Medicare and I've protected those things which I want, but are not covered by the A&B with those supplemental plans. I'm the only one in the group that gets to create a medical insurance plan that fits my needs and meets my financial situation.
Everyone else? Hey, you got what you got and for a lot of you, what you got was not what you wanted.
A Paradigm Shift:
For all intents and purposes, the ACA has been dealt a "death blow." The repeal of the individual mandate is a game changer with the American health care system and potentially eliminates one of the largest hurdles to retiring early.
But then again, things happen.
Suffice to say, it is going to be incredible interesting how this one part of the new tax bill shakes out.
Will insurers be able to offer insurance coverage that allows you to pick and choose the coverage you want and the coverage you need? Will the cost of insurance decline because people can engage in a more open market shopping experience and buy only the coverage that they need? Will insurers create a new buffet of choices to meet the needs of the marketplace?
An even bigger question, it would seem, is how will this change health care moving forward and how will it impact the companies that currently provide that health care? From the insurers to the medical providers?
It might be to early to forecast what's going to happen in the coming months, relative to health issues and insurance, but in my opinion, being the realist, I believe their is going to be ample opportunity for both citizens and for investors in the months ahead.
Can someone fill my glass?
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