Briefing from Bruce - September 2026

Briefing from Bruce – September 2026

Briefing From Bruce – September 2026

A healthy retirement requires more than a well-diversified portfolio. It also requires a plan to manage healthcare costs, navigate Medicare, and prepare for potential long-term care needs.

For many retirees, healthcare may be their largest expense.

While Medicare provides an important safety net, it does not cover every medical expense, and out-of-pocket costs can add up. That surprises some folks.

A just-released survey by eHealth notes that 88% of current Medicare beneficiaries incorrectly believe there is an annual cap on out-of-pocket costs under Original Medicare Parts A and B, while 63% of current Medicare beneficiaries do not understand that they will typically pay 20% for covered medical charges if enrolled solely in Original Medicare.

How are healthcare costs divvied up?

According to Fidelity, 44% is funneled into Medicare Part B and D premiums, 47% goes to medical expenses such as co-payments, deductibles, and hospital visits, and the remainder goes to prescription drugs.

The challenge is that healthcare expenses are often unpredictable. A serious illness, injury, or extended stay in a nursing facility can place significant strain on your finances.

As a result, view healthcare planning not as a separate exercise but as an integral part of your overall financial strategy.

Fortunately, investors can take steps to prepare.

Understanding Medicare options, incorporating healthcare expenses into retirement projections, evaluating long-term care strategies, and making thoughtful use of tax-advantaged accounts such as Health Savings Accounts (HSAs) can improve both financial flexibility and peace of mind.

Your options under Medicare

You become eligible for Medicare at age 65. Enrollment occurs within a 7-month window around your 65th birthday. Miss that window, and you may incur a penalty when you enroll, unless you have coverage through a qualifying employer-sponsored plan.

Let’s review the ABCs (and D) of Medicare:

• Part A—Hospital insurance (free for most)

• Part B—Medical insurance

• Part D—Prescription drug coverage

• Medigap supplemental insurance

• Part C—Medicare Advantage Plans

While Medicare provides generous coverage for hospital stays, you’ll still be responsible for some out-of-pocket expenses.

For a hospital inpatient stay in 2026, you pay:

• $1,736 deductible per benefit period

• $0 for the first 60 days of each benefit period (after you pay the deductible)

• $434 per day for days 61–90 of each benefit period

• $868 per “lifetime reserve day” after day 90 of each benefit period (up to a maximum of 60 days over your lifetime)

• All costs for each day after day 150 of the benefit period

But nursing care support is limited, as traditional Medicare covers only a skilled facility, medically necessary treatment, or rehabilitation provided by licensed nurses or therapists.

To obtain these benefits, you must meet Medicare’s rules, such as a recent hospital stay for at least three days in a row, and coverage is limited.

In 2026, you pay:

• $0 for the first 20 days of each benefit period

• $217 per day for days 21–100 of each benefit period

• All costs for each day after day 100 of the benefit period

Medicare does not provide custodial care, or everyday activities that include bathing, dressing, bathroom use, or eating in a nursing home.

Medical costs for Part B

The Part B annual deductible is $283. For most folks, that’s reasonable.

But Part B also requires a copay once expenses surpass the initial deductible—20% of the cost for each Medicare-approved service or item.

Enter Medigap

Parts A and B pay your medical bills, but when traditional coverage ends, a Medigap policy helps bridge the gap.

Medigap policies are standardized in most states (Plans A, B, D, G, K, L, M, and N). In other words, coverage is the same no matter which company sells it. Prices, however, can vary.

Once you buy a policy, you’ll keep it as long as you pay your Medigap premiums. All Medigap policies are automatically renewed every year. They can’t be canceled by your insurance company unless:

• You stop paying your premiums.

• You weren’t truthful on the Medigap policy application.

• The insurance company goes bankrupt.

What is the upside to traditional Medicare?

• There are no worries about in-network doctors, PPOs, and HMOs that are so prevalent today. You may see any specialist (no referral needed) or doctor or go to any hospital in the country that accepts Medicare.

• You’ll rarely need prior authorization as long as the procedure is medically necessary.

• You have coverage throughout the country. It’s a great option for those who reside in different states during the year.

• Medigap coverage allows for a greater degree of certainty regarding premiums and medical costs.

But be aware of the downsides:

• There is no out-of-pocket limit to Part A and Part B. Therefore, you need a Medigap supplement to mitigate unlimited financial risk.

• You must purchase Part D for drug coverage.

• Dental, vision, and hearing are not covered.

A private alternative

Medicare Part C is increasing in popularity. Part C combines Parts A and B. Private insurance companies offer these plans, which Medicare must approve.

Part C often includes Part D drug coverage and usually includes routine dental care, eye exams, and glasses, but it depends on the plan you choose. Besides, you don’t need a Medigap plan.

Benefits

• The convenience of in-network coverage managed by one insurance company

• Maximum annual out-of-pocket costs

• No need for Medigap

• Added benefits such as dental, vision, hearing, fitness club memberships, and more, depending on your plan

• Typically, lower monthly premiums

Drawbacks

• In-network restrictions

• Insurance company pre-approval for a procedure

• Specialist referrals may be required

• Possible co-pays

• Annual changes to plans

Open enrollment

Each year, open enrollment runs from October 15 through December 7.

This allows you to:

• Join, drop, or switch to another Medicare Advantage Plan with or without drug coverage (or add or drop drug coverage).

• Switch from Original Medicare to a Medicare Advantage Plan or from a Medicare Advantage Plan to Original Medicare.

• Join, drop, or switch to another Medicare drug plan (Part D) if you’re in Original Medicare.

Can’t I just default to my current plan? The short answer is usually yes.

But first, those in a Medicare Advantage or a prescription drug plan should always review the materials their plans send them, like the “Evidence of Coverage” and “Annual Notice of Change.”

If your plan is changing, make sure it still meets your needs for 2027. If you’re satisfied with your current coverage and it’s still being offered, renewal is typically automatic.

If you are content with Medicare A and B, renewal is automatic. The same is true for Medigap coverage.

If you have questions during open enrollment, please feel free to check in with us. While we are not insurance brokers, we can help you think through the financial implications of your choices, consider alternatives, and, if needed, point you toward the appropriate resources.

Exploring long-term care

Long-term care is often an overlooked retirement expense. Unlike traditional medical care, long-term care assists with daily activities, such as bathing, dressing, eating, and managing medications.

Planning ahead can help protect both your finances and your independence. Start by understanding what Medicare covers and where gaps exist.

Then explore how you would fund extended care. Might it be through savings, long-term care insurance, hybrid insurance that includes long-term care benefits, or a combinationof approaches?

It’s also important to convey your wishes with loved ones and ensure key legal documents are in place. By preparing before a health event occurs, you can reduce financial stress and protect assets.

If long-term care planning is a missing puzzle piece in your retirement strategy, now is a good time to start the conversation.

Contact us to discuss your options and develop a plan that aligns with your goals, circumstances, and personal care preferences.

HSAs

Do you have a Health Savings Account (HSA), which you can fund when paired with certain high-deductible insurance plans?

You can use HSA funds to pay for a wide range of qualified healthcare costs. In addition, you may use HSA funds to pay Medicare Part B, C, and Part D premiums. You cannot use tax-free funds to pay Medigap premiums.

But at 65, you may withdraw from your HSA for any non-medical expense without incurring a penalty.

Like distributions from a traditional IRA, however, those withdrawals are subject to ordinary income taxes. In this way, an HSA can serve a dual purpose: it functions as a retirement savings account while still offering tax-free withdrawals for qualified medical expenses.

Incorporating an HSA into your retirement strategy may help preserve other retirement assets and offer you more flexibility to meet future healthcare needs.

Bottom line

While no one can predict future healthcare needs with certainty, proactive planning can help reduce surprises and better position you to focus on what matters most: enjoying retirement with confidence and maintaining the quality of life you’ve worked hard to achieve.

As your advisor, we’re here to help you evaluate your options, navigate the complexities of healthcare planning, and develop a financial strategy tailored to your goals and circumstances.

Tremors in treasuries

This month, we’re going to jump into a corner of the Treasury market that, for the most part, has not historically been reserved for individual investors. But it may be creating some headwinds for investors.

We’re talking about the 30-year Treasury bond.

Institutions such as pension funds, insurance companies, and endowments more commonly own the 30-year Treasury bond because they often have long-term liabilities extending decades into the future. Buy a maturity stretching out decades and match its guaranteed income with a corresponding liability.

If individual investors generally avoid this market, why is this important?

Investors often compare stock returns to what they can earn in risk-free Treasury yields. Since there is no risk of default, higher yields can encourage some investors to reallocate funds away from stocks in order to capture that higher return.

Last month, the 30-year Treasury reached its highest yield since 2007, rising about 5%, according to data provided by the St. Louis Federal Reserve. Bloomberg News said its gauge of global government bonds reached its highest level since 2008.

Key Index Returns
	August 2026 %	YTD %
Dow Jones Industrial Average	1.3	10.7
Nasdaq Composite	3.9	13.5
S&P 500 Index	2.6	12.3
Russell 2000 Index	0.9	19.1
MSCI World ex-USA**	2.0	12.0
MSCI Emerging Markets**	3.2	22.4
Bloomberg US Agg Total Return	0.4	-0.3

Source: Wall Street Journal, MSCI.com, Bloomberg, MarketWatch
MTD returns: July 31, 2026—August 31, 2026
YTD returns: December 31, 2025–August 31, 2026
**in US dollars

During a period of modest GDP growth and a soft labor market, bond yields might be expected to ease.

They haven’t.

What’s going on? Bondholders are focusing on several factors, including:

1. The large federal deficit and the need to issue new bonds to finance the deficit

2. Concerns about stubbornly elevated inflation

3. A greater insistence on a premium to lock up funds for long periods

4. Recent questions about Fed credibility

5. Rising corporate debt issuance to fund the AI buildout; some view this as a secondary factor

Let’s explore bullet point #4 in greater detail.

At the July Federal Reserve meeting, recently installed Fed Chair Kevin Warsh repeatedly emphasized that inflation remains too high and that restoring price stability is a top priority.

Yet, despite his tough rhetoric, the Fed left interest rates unchanged, and Warsh offered little clarity on how policymakers intend to bring inflation back to the Fed’s 2% target.

If inflation is indeed the primary threat and higher interest rates remain the Fed’s most powerful tool, investors naturally expected action or a clearer path forward.

Instead, the absence of both raised questions about the Fed’s resolve, and long-term Treasury yields responded accordingly, testing Warsh’s resolve.

For many investors, the issue was not whether Warsh was overly hawkish or overly dovish. Rather, it was the disconnect between his forceful language on inflation and the lack of a corresponding policy response.

In the market’s view, defeating inflation requires more than forceful rhetoric.

By stressing the problem while offering little guidance on when, how, or what might trigger the Fed to act, Warsh left investors unconvinced, and the bond market delivered its verdict through higher long-term yields.

At a late August speech, Warsh helped address some concerns, explicitly warning that the Fed may need to tighten policy if inflation fails to make “sufficient and clear” progress toward its 2% target.

Given the rise in yields, US Treasury Secretary Bessent announced new plans to repurchase additional outstanding 10- to 30-year securities, which, in theory, raises demand for those bonds and puts downward pressure on yields (yields and prices move in opposite directions).

Bloomberg News reported near the end of August that “key market metrics and positioning show that it’s having an impact.” However, questions remain longer-term.

Despite the recent uptick in yields, 5% is not really that unusual. In fact, it is closer to the long-term historical average than the exceptionally low yields investors became accustomed to after the 2008 financial crisis.

As we enter September, a historically weak month for stocks, investors have largely shrugged off the rise in yields so far, as booming corporate profits continue to provide a powerful tailwind for equities.

Put another way, higher yields may not have derailed the market’s advance so much as tempered its pace.

I trust you found this review insightful. If you have any questions or would like to talk through your portfolio or other financial goals, please don’t hesitate to reach out to me or anyone on our team.

Bruce Elfenbein

Certified Financial Fiduciary ®️