Medicare Open Enrollment: How You Can Protect Both Your Health and Finances

October 11, 2024

 Medicare, health insurance for those 65 and over, is essential coverage for many seniors as it helps pay for healthcare costs during retirement. More than 66 million Americans on Medicare rely on their insurance to help pay for healthcare expenses including doctor visits, preventative services, hospital visits, and medical supplies. 


With medical expenses likely one of the biggest expenses you’ll face as a retiree, it’s important to make sure that your Medicare coverage fits your needs. Each year, during the Medicare open enrollment period, Medicare beneficiaries have the opportunity to review and make changes to their coverage. 


While it may be tempting to stick with the same plan for the sake of convenience, ignoring this annual window can result in missed opportunities for better coverage and potential cost savings. The decisions you make during open enrollment not only affect the covered healthcare options you have access to—they can also significantly impact your financial health.


Medicare Open Enrollment Period: What You Should Know


Healthcare needs and costs can change over time, and what was a good fit one year may not be the next. Medicare open enrollment occurs every year from October 15 to December 7, giving you time to review, change, or adjust your Medicare coverage. Any changes made go into effect on January 1 of the next year.


There are several plan choices available during open enrollment, and you have the option to:


  • Switch between Original Medicare (Parts A and B) and Medicare Advantage (Part C)
  • Change your Part D prescription drug plan
  • Enroll in or update your Medigap policies for additional coverage


By understanding the different parts of Medicare and how they work together, you can make informed decisions on what coverage meets your medical and financial needs:


Medicare Part A: Hospital Insurance


Medicare Part A covers inpatient hospital stays, care in skilled nursing facilities, hospice care, and limited home healthcare services. Most likely, you qualify for premium-free Part A if you or your spouse paid Medicare taxes while working for a certain period (generally at least 10 years). If you don’t qualify for premium-free Part A, you can still buy it.


Understanding what Part A covers can help you better estimate your hospital-related costs, particularly if you anticipate any significant inpatient care or long-term stays.


Medicare Part B: Medical Insurance


Medicare Part B covers doctor visits, outpatient care, preventative services, and medically necessary services (labwork, surgeries, mental health services). Almost everyone pays a monthly premium for Part B, unlike Part A, and these premiums are based on income.


Because Part B covers routine medical care and outpatient services, factor these costs into your overall healthcare budget, especially if you frequently visit the doctor or require any specialist care.


Medicare Part C: Medicare Advantage


Medicare Part C, or Medicare Advantage, is an alternative to Original Medicare (Parts A and B) and is offered through private insurance companies. Medicare Advantage plans are required to provide, at a minimum, the same coverage as Original Medicare, but these plans often include additional benefits such as vision, dental, hearing, and prescription drug coverage (Part D).


Medicare Advantage plans can be a cost-effective option if you’re seeking additional benefits or lower out-of-pocket limits. However, the plans also come with network restrictions, which means you may be limited to seeing doctors and hospitals that are within the plan’s network.


Medicare Part D: Prescription Drug Coverage


Medicare Part D helps cover the cost of prescription drugs. Part D plans are offered through private insurance companies, and you can either add a Part D plan to your Original Medicare coverage or get it through a Medicare Advantage plan that includes drug coverage.


Because prescription drug costs can add up quickly, make sure to review your Part D plan each year to confirm that it covers the medications you need at an affordable price.


Medigap: Supplemental Insurance


Medigap, also called Medicare Supplement Insurance, is extra insurance you can buy from private insurance companies to help cover some out-of-pocket costs not covered by Original Medicare, such as deductibles, coinsurance, and co-payments.


Medigap policies can provide peace of mind by minimizing the financial risk of high out-of-pocket expenses. Remember, however, that you can’t have both a Medigap policy and a Medicare Advantage plan.


How Your Medicare Choices Can Impact Your Finances


Even if you’d like to stick with your current plan, don’t skip an annual review: plan costs, benefits, and available options can change from year to year, as can your health needs. If you don’t review your plan, you could face unexpected costs that risk your financial health, or have inadequate coverage right when you need it the most.


The choices you make during Medicare open enrollment directly impact your monthly premiums and out-of-pocket costs. Deductibles, co-pays, and coinsurance can add up, so make sure to weigh the total cost of any plan you’re considering, not just the premiums. 


Deciding between Original Medicare and Medicare Advantage can also significantly impact your medicare finances. While Medicare Advantage plans often have lower premiums, they can come with higher out-of-pocket costs. Pairing Original Medicare with Medigap can help reduce unexpected expenses, but it may involve higher upfront costs. 


One of the most important things you can do during the Medicare open enrollment period is to compare plans, as premiums, copayments, and coverage can change every year. By comparing your plan options, you can make sure you’re not overpaying for coverage or missing out on better options.


What to Keep in Mind During Medicare Open Enrollment


If you avoid these common mistakes during Medicare open enrollment, you can better protect both your health and your financial well-being:


  • Don’t overlook any plan changes: Don’t assume your current plan will continue to meet your needs—costs, coverage, and networks can change every year, and your current plan might not be the best fit anymore, both health-wise and financially.


  • Don’t assume the cheapest plan is the best: While it may be tempting to choose the plan with the lowest premium, it doesn’t always equate to the most affordable option. Lower premiums often come with higher deductibles, co-pays, and limited coverage, which can end up costing you more in the long run.


  • Don’t ignore future healthcare needs: Many often only focus on their immediate healthcare needs and forget to consider the possibility of future health issues. While you can’t predict the future, recognizing potential chronic or long-term health conditions can help you choose a plan that will continue to fit your needs in the future.


Healthcare and Financial Planning


While Medicare covers healthcare costs, it doesn’t cover everything. Make sure to include not only the costs associated with Medicare but also other potential medical expenses, such as long-term care, in your retirement and estate planning. This can help you to prepare for the unexpected, plan for the future, and protect your financial health. 


Anticipating your healthcare needs in your financial planning can also help you preserve your assets for future generations, and help you leave a lasting financial legacy.


At Five Pine Wealth Management, we can work with you to integrate your healthcare decisions and medicare finances into a comprehensive financial plan that supports your retirement and estate strategies. As fiduciary financial advisors, we are committed to acting in your best interest to help you achieve your objectives and protect and preserve your wealth. To see how we can help you, give us a call at 877.333.1015 or send us an email today.


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You've Maxed Your 401(k). Now What? A Strategic Guide for High Earners

January 26, 2026
Key Takeaways High earners maxing out 401(k)s at $24,500 are only saving about 8% of a $300,000 income in their primary retirement account. The mega backdoor Roth strategy can increase total 401(k) contributions to $72,000 annually with tax-free growth. A comprehensive approach can create nearly $3 million in additional retirement wealth over 20 years. It's 2026. You're checking all the boxes. You're earning upwards of $300,000 annually, and you're maxing out your 401(k) every year. You've reached the $24,500 contribution limit and feel confident about securing your financial future. Then you realize $24,500 represents less than 8% of your income. Over 20 years, this gap adds up to millions in lost opportunity. Thankfully, you're not stuck with the basic 401(k) playbook. There are sophisticated strategies beyond your contribution limit. 5 Strategic Moves for High Earners with Maxed-Out 401(k)s Here are five sophisticated strategies that can help you build wealth beyond your basic 401(k) contributions. All projections assume a 7% average annual return and are estimates for illustrative purposes. 1. Mega Backdoor Roth Contributions If your employer's 401(k) plan allows after-tax contributions, this could be your biggest opportunity. With employee contributions, employer match, and after-tax contributions, the combined 401(k) limit for 2026 is $72,000 ($80,000 if you're 50 or older). The mega backdoor Roth works because you immediately convert those after-tax contributions into a Roth account, where they grow tax-free forever. The catch: Not all employers offer this option. You need a plan that permits after-tax contributions and in-service Roth conversions. The impact: The available space for after-tax contributions depends on your employer match. With a typical employer match of 3-6% (roughly $10,000-$21,000 on a $350,000 salary), you could contribute approximately $26,500-$37,000 annually. At 7% average returns over 20 years, this creates approximately $1.1-$1.5 million in additional tax-free retirement savings. 2. Donor-Advised Funds for Charitable Giving If you're charitably inclined, donor-advised funds (DAFs) offer a way to bunch several years of charitable contributions into one tax year, maximizing your itemized deductions while still spreading your giving over time. You get an immediate tax deduction for the full contribution, but you can recommend grants to charities over many years. The funds grow tax-free in the meantime. The catch: Once you contribute to a DAF, the money is irrevocably committed to charity. You can't get it back for personal use. The impact: Contributing $50,000 to a DAF in a high-income year (versus giving $10,000 annually) can create immediate federal tax savings of $15,000-$18,500 while still allowing you to support the same charities over five years. 3. Taxable Brokerage Accounts with Tax-Loss Harvesting Once you've maximized tax-advantaged accounts, strategic taxable investing becomes your next move. The key is working with a financial advisor who implements systematic tax-loss harvesting throughout the year. Tax-loss harvesting involves selling investments at a loss to offset capital gains elsewhere. Done strategically, this can save thousands in taxes annually. The catch: Long-term capital gain rates (0%, 15%, or 20%) are lower than ordinary income tax rates, but you're still paying taxes on gains. It's less tax-efficient than retirement accounts, but far better than ignoring tax optimization. The impact: For high earners in the 35-37% ordinary income brackets, the difference between long-term capital gains (20%) and ordinary rates is significant. Effective tax-loss harvesting on $50,000 in annual gains over 20 years could save $150,000+ in taxes. 4. Health Savings Account (HSA) Triple Tax Advantage HSAs offer a unique triple tax benefit: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. With 2026 contribution limits of $4,400 for individuals and $8,750 for families, this adds another powerful layer to your strategy. You can invest HSA funds just like an IRA and let them grow for decades. After age 65, you can withdraw the funds for any purpose, medical or otherwise. The catch: You must have a high-deductible health plan to qualify for an HSA. After age 65, non-medical withdrawals are taxed as ordinary income (like traditional IRA distributions), but you still benefit from the upfront deduction and decades of tax-free growth. The impact: Contributing the family maximum ($8,750) annually for 20 years at a 7% average annual return creates approximately $355,000-$360,000 in tax-advantaged savings. 5. Backdoor Roth IRA Contributions Not to be confused with mega backdoor Roth contributions! Even if your income exceeds the Roth IRA contribution limits, you can still fund a Roth through the backdoor method: make a non-deductible contribution to a traditional IRA, then immediately convert it to a Roth IRA. The catch: If you have existing traditional IRA balances, the pro-rata rule complicates things. You may want to consider rolling those funds into your 401(k) first if your plan allows. The impact: Contributing $7,000 annually through the backdoor Roth for 20 years at 7% average annual return creates approximately $285,000-$290,000 in tax-free retirement savings. What Compounding These Strategies Looks Like Over 20 Years Let’s look at approximate outcomes based on a 7% average annual return. 401(k) Only: Annual contribution: $24,500 Total after 20 years: ~$1M 401(k) + Mega Backdoor Roth: Annual contribution: $72,000 Total after 20 years: ~$3M Note: Mega backdoor Roth space varies based on your employer's match. These calculations assume you're maximizing the total annual limit. Comprehensive Approach (under age 50): Mega Backdoor Roth: ~$3.0M HSA: ~$350K-$360K Backdoor Roth IRA: ~$285K-$290K Strategic taxable investing with tax-loss harvesting Total retirement savings: ~$3.6M+, plus taxable investments Comprehensive Approach (ages 50-59): With higher contribution limits and catch-up contributions, total retirement savings can reach ~$4M+ over 20 years. Comprehensive Approach (ages 60–63 with enhanced catch-up contributions) Higher contribution limits during peak earning years allow for meaningful acceleration of retirement savings. The exact impact depends on timing, contribution duration, and existing balances. The Bottom Line The difference between stopping at your basic 401(k) and implementing a comprehensive strategy can approach $3 million or more in additional retirement wealth over time. Why Strategic Coordination Matters These aren't either/or decisions. The most effective approach coordinates multiple strategies while ensuring everything works together. At Five Pine Wealth Management , we help high-earning clients build comprehensive plans that go beyond the 401(k). We coordinate your employer benefits, tax strategies, and investment accounts to create a cohesive approach that maximizes your wealth-building potential. This requires working across several areas: Analyzing your employer's 401(k) plan for mega backdoor Roth opportunities Implementing systematic tax-loss harvesting in taxable accounts Coordinating Roth conversions and backdoor contributions Optimizing your HSA as a long-term retirement vehicle Ensuring charitable giving strategies align with your tax situation Maximizing catch-up contributions when you reach milestone ages As fiduciary advisors, we're legally obligated to act in your best interest. That means we're focused on strategies that serve your goals, not products that generate commissions. Ready to see what's possible beyond your 401(k)? Email us at info@fivepinewealth.com or call 877.333.1015 to schedule a conversation about your specific situation. Frequently Asked Questions (FAQs) Q: Does my employer's 401(k) plan automatically allow mega backdoor Roth contributions? A: No. You need a plan that permits after-tax contributions and in-service conversions to Roth. Check with your HR department. Q: How do I prioritize which investment strategies to use? A: Generally, maximize employer match first (it's free money), then fully fund your 401(k), explore Mega Backdoor Roth if available, max out your HSA, consider backdoor Roth IRA contributions, and then move to taxable accounts with tax-loss harvesting. We can help determine the right sequence for your circumstances.

What's the Best Asset Allocation for Someone 10 Years Away from Retirement?

December 22, 2025
Key Takeaways Your guaranteed income sources (pensions, Social Security) matter more than your age when deciding allocation. Retiring at 65 doesn't mean your timeline ends. You likely have 20-30 years of investing ahead. Think in time buckets: near-term stability, mid-term balance, long-term growth. You're 55 years old with over a million dollars saved for retirement. Your 401(k) statements arrive each month, and you find yourself questioning whether your current allocation still makes sense. Should you be moving everything to bonds? Keeping it all in stocks? Something in between? There's no single "correct" asset allocation for everyone in this position. What works for you depends on factors unique to your situation: your retirement income sources, spending needs, and risk tolerance. Let's look at what matters most as you approach this major life transition. Why Asset Allocation Changes as Retirement Approaches When you’re 30 or 40, your investment timeline stretches decades into the future. When you’re 55 and looking to retire at 65, that equation changes because you’re no longer just building wealth: you’re preparing to start spending it. You need enough growth to keep pace with inflation and fund decades of retirement, but you also need stability to avoid the need to sell investments during market downturns. At this point, asset allocation 10 years before retirement is more nuanced than a simple “more conservative” approach. Understanding Your Actual Time Horizon Hitting retirement age doesn't make your investment timeline shrink to zero. If you retire at 65 and live to 90, that's a 25-year investment horizon. Think about your money in buckets based on when you'll need it: Time Horizon Investment Approach Example Needs Short-Term (Years 1-5 of Retirement) Stable & accessible funds Monthly living expenses, healthcare costs, and early travel plans Medium-Term (Years 6-15) Moderate risk; balanced growth Home repairs, care and income replacement, and helping grandchildren with college Long-Term (Years 16+) Growth-oriented with a Long-term care expenses, decades-long timeline legacy planning, and extended longevity needs This bucket approach helps you think beyond simple stock-versus-bond percentages. Asset Allocation 10 Years Before Retirement: Starting Points While there's no one-size-fits-all answer, here are some reasonable starting frameworks: Conservative Approach (60% stocks / 40% bonds) : Makes sense if you have minimal guaranteed income or plan to begin drawing heavily from your portfolio upon retirement. Moderate Approach (70% stocks / 30% bonds) : Works well for those with some guaranteed income sources, moderate risk tolerance, and a flexible withdrawal strategy. Growth-Oriented Approach (80% stocks / 20% bonds) : Can be appropriate if you have substantial guaranteed income covering basic expenses and the flexibility to reduce spending temporarily as needed. Remember, these are starting points for discussion, not recommendations. 3 Steps to Evaluate Your Current Allocation Ready to see if your current allocation still makes sense? Here's how to start: Step 1: Calculate your current stock/bond split. Pull your recent statements and add up everything in stocks (including mutual funds and ETFs) versus bonds. Divide each by your total portfolio to get percentages. Step 2: List your guaranteed retirement income. Write down income sources that aren't portfolio-dependent: Social Security (estimate at ssa.gov), pensions, annuities, rental income, or planned part-time work. Total the monthly amount. Step 3: Calculate your coverage gap. Estimate monthly retirement expenses, then subtract your guaranteed income. If guaranteed income covers 70-80%+ of expenses, you can be more growth-oriented. Under 50% coverage means you'll need a more balanced approach. When to Adjust Your Allocation Here are specific triggers that signal it's time to review and potentially adjust: Your allocation has drifted more than 5% from target. If you started at 70/30 stocks to bonds and market movements have pushed you to 77/23, it's time to rebalance back to your target. Your retirement timeline changes significantly. Planning to retire at 60 instead of 65? That's a trigger. Every two years of timeline shift warrants a fresh look at your allocation. Major health changes occur. A serious diagnosis that changes your life expectancy or healthcare costs should prompt an allocation review. You gain or lose a guaranteed income source. Inheriting a pension through remarriage, losing expected Social Security benefits through divorce, or discovering your pension is underfunded. Market volatility affects your sleep. If you're checking your portfolio daily and feeling genuine anxiety about normal market movements, your allocation might be too aggressive for your comfort, and that's a valid reason to adjust. Beyond Stocks and Bonds Modern retirement planning involves more than just deciding your stock-to-bond ratio. Consider international diversification (20-30% of your stock allocation), real estate exposure through REITs, cash reserves covering 1-2 years of spending, and income-producing investments such as dividend-paying stocks. The Biggest Mistake: Becoming Too Conservative Too Soon Moving everything to bonds at 55 might feel safer, but it creates two significant problems. First, you're almost guaranteeing that inflation will outpace your returns over a 30-year retirement. Second, you're missing a decade of potential growth during your peak earning and saving years. The difference between 60% and 80% stock allocation over 10 years can mean hundreds of thousands of dollars in portfolio value. Being too conservative can be just as risky as being too aggressive, just in different ways. Questions to Ask Yourself As you think about your asset allocation for the next 10 years: What percentage of my retirement spending will be covered by Social Security, pensions, or other guaranteed income? How flexible is my retirement budget? Could I reduce spending by 10-20% during a market downturn? What's my emotional reaction to seeing my portfolio drop 20% or more? Do I plan to leave money to heirs, or is my goal to spend most of it during retirement? Your honest answers to these questions matter more than your age or any generic allocation rule. Work With Professionals Who Understand Your Complete Picture At Five Pine Wealth Management, we help clients work through these decisions by looking at their complete financial picture. We stress-test different allocation strategies against various market scenarios, coordinate withdrawal strategies with tax planning, and help clients understand the trade-offs between different approaches. If you're within 10 years of retirement and wondering whether your current allocation still makes sense, let's talk. Email us at info@fivepinewealth.com or call 877.333.1015 to schedule a conversation. Frequently Asked Questions (FAQs) Q: What is the rule of thumb for asset allocation by age? A: Traditional rules like "subtract your age from 100" are oversimplified. Your allocation should be based on your guaranteed income sources, spending flexibility, and risk tolerance; not just your age. Q: Should I move my 401(k) to bonds before retirement? A: Not entirely. You still need growth to outpace inflation. Gradually shift toward a balanced allocation (60-80% stocks, depending on your situation) and keep 1-2 years of expenses in stable investments. Q: What's the difference between stocks and bonds in a retirement portfolio?  A: Stocks provide growth potential to keep pace with inflation but come with volatility. Bonds offer stability and income but typically don't grow as much.