A Financial Calendar for the Fourth Quarter
The fourth quarter is chock full of dates and deadlines important to your financial well-being. Here are a few key dates you need to mark on your calendar for the remaining months of 2016:
Oct. 15 - Dec. 7: Medicare Open Enrollment
Now is the time for Medicare-eligible individuals to take a fresh look at their Prescription Part D and Medicare Advantage coverage. Premiums for such plans can change every year. Prescription plan formularies (the list of covered drugs) and the prices paid for covered drugs, typically change every year - make sure the drugs you take will be covered by your plan in 2017. If not, shop for a new plan at https://www.medicare.gov/find-a-plan/questions/home.aspx.
Medicare Advantage plans can also change the list of providers available in their network, as well as the cost and additional benefits. Participants should receive a notice from their current provider on what changes will be taking place for 2017.
Nov. 1 - Jan. 31: Affordable Care Act (ACA) Open Enrollment
While the majority of individuals have health insurance through Medicare or their employer, many receive their coverage directly through individual plans with insurance carriers.
2017 looks to bring many (mostly negative) changes to the individual marketplace. While carriers are not required to provide details until Nov. 1, many have already announced their intentions to drop out of the individual marketplace. In New Jersey, for example, only 2 providers remain in the Healthcare Exchange for 2017, down from the 5 carriers providing coverage in 2016. Less competition also means higher rates and less generous coverage. And while open enrollment lasts until Jan. 31, for those who require coverage to begin on Jan. 1 2017, most likely their enrollment deadline will be Dec. 15 or even earlier.
Preparation is the key here - make sure you know how you've used healthcare in the past and how you anticipate using it in the future. Remember in the past many web-based enrollment programs were overwhelmed in the initial days of open enrollment, so your window of opportunity to compare and analyze offerings may be even shorter. You can find out more about your options at www.healthcare.gov.
Nov. 8: Election Day
Vote! And don't be surprised if the markets react strongly, one way or the other. But remember - elections in and of themselves don't typically have long lasting effects. It's the policies implemented in the weeks and months after the new administration comes in that will determine the longer term direction of the markets.
Dec. 1 -31: Mutual Fund Distribution Season
Mutual funds must distribute any capital gains incurred during the year to its shareholders. This is typically done in the last quarter of the year, most often in December. Note that a fund doesn't need to be a great performer to have a large distribution in December - if one has been UNDER-performing, and thus losing clients/assets, it may have to sell investments to raise the cash to cover large redemptions.
If your investments are in a tax-qualified account (401k or IRA), this won't be much of a concern for you, as only distributions from these accounts are taxed as ordinary income, regardless of the source. However, if your mutual funds are held in a non-qualified (taxable) account, you may have to pay taxes on these capital gain distributions, even if you haven't redeemed any mutual fund shares yourself! Call us if you have concerns about taxation and your own holdings.
Dec. 31: Required Minimum Distribution Deadline
You MUST take distributions annually from your IRAs and company retirement plans once you reach age 70 ½, based on a combination of your age and the total amount of your retirement investments as of the end of the previous year. RMDs are also a must if you inherit an IRA.
You don't have to take a distribution from EACH account, but you must take the total amount required from at least one account before December 31 of each year. Penalties for not taking the required distribution are steep - up to 50% of the required distribution amount! So make sure you're on top of this requirement.
Dec. 31: 529 Plan Distribution Deadline
Tax-free distributions from 529 plans can only be taken in the same calendar year as qualified education expenses were incurred. So if you are paying Spring 2017 tuition in December of 2016, you want to make sure you withdraw reimbursement funds from the 529 plan in 2016, not 2017 (although the IRS is working on rules to allow a 3-month window into the next year, these rules are not yet in place).
These are just a sampling of the many deadlines associated with the end of the year. If you have any questions about your own situation, please give us a call.