Podcast Transcripts

Market Talk Podcast Episode 59: Protecting Your Legacy - Estate Planning with Kim Hegwood

Market Talk Podcast Episode 59: Protecting Your Legacy — Estate Planning with Kim Hegwood

Host: Natalie Picha, Chief Experience Officer and Partner, Royal Harbor Partners Wealth Management
Guest: Kim Hegwood, Managing Attorney, Your Legacy Legal Care; Host, Life Happens Podcast
Topic: Estate planning, wills, trusts, guardianship, incapacity planning, and Medicaid crisis planning

Guest Bio

Kim Hegwood is an elder law and estate planning attorney based in Houston, Texas. She has been practicing since graduating from South Texas College of Law in 1996. After watching her grandparents struggle to maintain their independence as they aged — navigating legal, financial, and emotional challenges — Kim dedicated her career to educating and helping families preserve their dignity and protect their assets.

Her practice focuses exclusively on:

Elder law
Asset protection
Estate planning
Medicaid crisis planning
Probate
Guardianship

Kim is a Certified Dementia Practitioner and a member of the National Academy of Elder Law Attorneys.

Kim’s Background and Path to Elder Law

Kim practiced litigation for approximately the first eight years of her career, alongside wills, probate, and guardianship work. Around 2004, her grandparents began to decline. Her grandfather stopped working to care for her grandmother, neglected his own health, and suffered a stroke. Kim stepped in to hire caregivers, manage finances, and coordinate medical appointments.

Her grandparents had only wills — no powers of attorney or other incapacity documents. When Kim drafted power of attorney documents for them, her grandfather refused to sign, partly because their longtime attorney had never told them they needed such documents. This experience underscored a critical gap in estate planning: documents that address incapacity, not just death.

After her grandparents passed in 2005 and 2006, Kim recognized she needed a change. In 2008 she left litigation and transitioned into dedicated estate planning and elder law — a shift she credits to both personal burnout and a timely opportunity to receive advanced training in trust planning, Medicaid crisis planning, and elder law.

Key Topics Covered

Why a Will Is Not Enough

A will only addresses what happens after death. Planning for incapacity — the period when a person is still alive but unable to manage their own affairs — requires a separate set of documents:

Statutory Durable Power of Attorney (Financial POA): Authorizes a designated agent to manage finances. Without it, no one has legal authority to pay bills, access accounts, or manage assets, even a family member.
Medical Power of Attorney: Designates who makes healthcare decisions if the person cannot.
HIPAA Authorization: Allows the agent to access medical records.
Directive to Physicians (Living Will/Advance Directive): Specifies end-of-life care preferences if the person is terminal or incapacitated.
Designation of Guardian: Names a preferred guardian for the person themselves (not just minor children) to prevent family disputes over caregiving.

“We plan for incapacity way more than we plan for death. Death is easy. It’s that incapacitated state that you have to plan for.”
— Kim Hegwood

When to Sign Documents

Documents should be signed while the person is still mentally competent. Waiting until a crisis makes signing difficult or impossible. Key considerations:

Doctors are often reluctant to put incapacity determinations in writing, making “springing” powers of attorney (those that only activate upon incapacity) slow and impractical.
Clients diagnosed with early-stage dementia should sign and update their documents annually for as long as they remain competent.
Older financial powers of attorney may be rejected by financial institutions; having them drafted and on file in advance helps avoid delays.
Only put someone on a power of attorney document if you trust them implicitly.

Privacy and Control Concerns

Some clients are reluctant to add agents to their accounts due to privacy concerns. Options include:

Powers of attorney that activate immediately (providing access when needed without delays)
Powers of attorney that activate only upon incapacity (more private but slower to implement)
Working with financial institutions that have their own POA forms

Wills vs. Trusts

Will-based planning:

Assets passing through a will go through probate, which is public record
Creditors are notified and paid through probate
Beneficiary designations on accounts, retirement plans, and insurance typically override wills
Making “the estate” the beneficiary of financial accounts is a common mistake — it routes everything through probate unnecessarily

Trust-based planning:

Private — not part of the public record
Avoids probate for assets properly titled in the trust
Allows detailed instructions for how and when beneficiaries receive assets
Highly recommended for blended families, large estates, children with spending issues, and clients with long-term care concerns

Blended families: Will-based planning can inadvertently disinherit children from a prior relationship. If a surviving spouse inherits everything outright, they can change beneficiaries to favor their own children. Trust planning prevents this by setting defined distributions for all parties.

Remarriage provisions in trusts: A trust can require a prenuptial agreement before a surviving spouse remarries, protecting the deceased spouse’s share of the estate for the children.

Revocable vs. Irrevocable Trusts

Revocable (Living) Trust:

Can be changed or revoked during the grantor’s lifetime
Uses the grantor’s Social Security number (no separate tax return required while both spouses are living)
Provides privacy and avoids probate
Becomes irrevocable (or splits into separate shares) when one spouse passes

Irrevocable Trust:

Cannot be easily changed once executed
Removes assets from the grantor’s taxable/countable estate
Provides asset protection from creditors and long-term care costs
Used for Medicaid planning (must be established at least five years before applying, due to the look-back period)

Income-Only Irrevocable Trust (a frequently used tool at Kim’s firm):

Grantor retains only the income from the trust assets
Principal is protected from Medicaid and creditors
Still uses the grantor’s Social Security number (treated as a “grantor trust” for tax purposes — intentionally “defective”)
Allows limited flexibility: changing trustees, modifying how beneficiaries receive distributions, adjusting the disability panel
No separate tax return required

Retirement Trust:

Particularly useful for second marriages
Names the surviving spouse as primary beneficiary, entitled only to required minimum distributions (RMDs)
Children receive the remainder after the spouse’s death
Protects children’s inheritance while still providing for the surviving spouse

Guardianship

Guardianship is a court-supervised process used when a person lacks capacity and has no valid power of attorney in place. It is:

Expensive: Initial costs of $4,000–$5,000, with total first-year costs of $7,500–$10,000 or more
Burdensome: Guardian of the estate must file annual accountings with the court, request a monthly allowance, and obtain court approval for expenditures
Slow: Harris County probate courts are currently 3–4 months behind on approving annual accountings
Avoidable: A properly drafted power of attorney eliminates the need for guardianship in most cases

“You might spend a thousand dollars doing power of attorneys, but you walk in to do a guardianship and you’re going to pay anywhere from four to five thousand dollars right off the front.”
— Kim Hegwood

Common situations that lead to guardianship:

A person who never had capacity (e.g., a child with a disability who turns 18)
A person who had capacity but declined without signing any legal documents

Special Needs Trusts

Special needs trusts allow families to set aside money for a child or dependent with a disability without disqualifying them from government benefits such as Medicaid and Supplemental Security Income (SSI).

Key features:

Assets inside the trust do not count against benefit eligibility thresholds
The trust pays for supplemental needs not covered by government programs
Care manager provisions can require someone to visit and check on the beneficiary regularly
Can include a trustee handbook with instructions for the trustee

Important planning tip: If grandparents or other relatives have estate plans that leave assets directly to a person with a disability, those plans need to be updated to direct the inheritance to the special needs trust instead. Direct inheritance can disqualify the beneficiary from benefits.

Setting up the trust early allows family members, friends, and others to name the trust as a beneficiary of life insurance policies or inheritances — even before significant assets are contributed.

Starting the Conversation

Many families avoid estate planning conversations. Strategies that help:

Share your own positive experience getting a plan done to encourage aging parents
Approach the conversation casually and over time — it doesn’t need to happen all at once
Remember that procrastination has real costs: outdated plans, missing documents, and family conflict

Advisors should also note: estate plans that are created but never updated become obsolete. Plans should be reviewed regularly and updated after major life events (marriage, divorce, death of a named person, change in assets, new laws).

Key Takeaways for Listeners

A will alone is not a complete estate plan. Powers of attorney, medical directives, and HIPAA authorizations are equally important.
Plan for incapacity before you need to — it is harder, slower, and more expensive to act during a crisis.
Trust planning offers privacy, flexibility, and protection that will-based planning cannot.
Blended families and families with special needs members have specific planning needs that require customized strategies.
Guardianship is costly and burdensome — proper advance planning almost always avoids it.
Estate plans must be funded and kept current to be effective.

Resources

Your Legacy Legal Care: yourlegacylegalcare.com
Life Happens Podcast: Hosted by Kim Hegwood
Royal Harbor Partners Wealth Management: royalharborpartners.com

Disclaimer

Royal Harbor Partners is a registered investment advisor. The opinions expressed on this show are their own. Registration of an investment advisor does not imply a certain level of skill or training. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not constitute an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment advisor to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.

Market Talk Episode 55: Texas Residential Real Estate — Local Insights with Britney Waterman and Ashley Graves

Host: Natalie Picha, Chief Experience Officer and Partner, Royal Harbor Partners Wealth Management
Guests: Britney Waterman and Ashley Graves, Steel Door Group at Martha Turner Sotheby’s International Realty
Topic: Houston and Texas residential real estate market, interest rates, housing affordability, inventory, migration trends, and outlook for 2026

Guest Bios

Britney Waterman

Britney Waterman is a native Houstonian and a Realtor since 2010. A consistent top producer, she holds the CNE and ABR designations and is a graduate of the University of Houston. Real estate has always been in her blood — her family owned a property management company. Britney is actively involved in the Houston Livestock Show and Rodeo, the Junior League of Houston, and serves as a Nativity Academy board member. She lives in Houston with her husband, three children, and their dogs.

Ashley Graves

Ashley Graves is a sixth-generation Texan with over two decades of experience buying, selling, leasing, and investing in the Houston area. A graduate of the Texas Realtor Leadership Program and a consistent top producer, Ashley has served on the board of directors for the Bay Area Transportation Partnership, the Bay Area Houston Economic Partnership, and the Community Association for Nassau Bay Enhancement, and has served on the Nassau Bay City Council and the Executive Board for the Harris County Mayors and Councils Association. She is a proud mother of two.

Firm Update: Steel Door Group Joins Martha Turner Sotheby’s International Realty

In April 2025, Steel Door Realty transitioned to Martha Turner Sotheby’s International Realty. The move provides agents with expanded resources, global brand backing, and a relocation department — allowing the team to serve clients not only throughout the Houston metro area but also connect them with top agents worldwide.

Key Topics Covered

Institutional Investor Ban on Single-Family Home Purchases

President Trump announced a ban on institutional investors purchasing single-family homes. To put this in context: investors of all sizes account for approximately 30% of single-family home purchases, but small investors make up more than 90% of investor-owners, and larger institutional investors represent only about 2% of single-family rental housing stock.

What Britney and Ashley are seeing on the ground:

Small individual investors — people looking to add a property or two to a personal portfolio — are the primary investor activity they are seeing, not large institutional buyers.
A separate and open question exists around master-planned communities where entire sections are being built specifically as rental homes. Whether new construction built for rental purposes falls under the ban is unclear and could have downstream effects on the buyer pool.
In Houston specifically, the percentage of institutional investment is very low. Cities like St. Louis, Missouri, where institutional buyers account for roughly 25% of purchases, would feel a much more dramatic impact.
The bottom line for most Houston-area buyers and sellers: this headline is unlikely to have a significant local effect.

$200 Billion in Mortgage Bond Purchases (Quantitative Easing)

The federal government announced $200 billion in mortgage bond purchases — effectively a form of quantitative easing aimed at bringing mortgage rates down and improving housing affordability.

This move will not dramatically shift affordability on its own. Rates have already drifted down from the mid-7% range and recently dipped below 6%.
The more likely effect: buyers who were on the fence may take it as a signal to move forward. It eases hesitation rather than opening the market to an entirely new pool of buyers.
Interest rates are only one piece of the affordability picture. Insurance costs — which continue to rise significantly — and Municipal Utility District (MUD) taxes on many new Texas construction homes add substantial ongoing costs that an interest rate improvement alone cannot offset.
The 40-year historical average for mortgage rates is approximately 5%. Rates today are near that historical norm, not the anomaly — the near-zero rates of the post-2008 and COVID era were the anomaly.

Inventory: Is the “Locked-In” Seller Psychology Changing?

For several years, homeowners with 2–3% mortgage rates were reluctant to sell and give up their low rate. That psychology is slowly shifting:

In 2025, many sellers tested the market with unrealistic prices and did not sell. In 2026, those same sellers are expected to re-list at more realistic price points.
Sellers are gradually accepting that today’s rates are the new normal. The psychological barrier is loosening.
Overall inventory has increased substantially, particularly in suburban markets, contributing to the shift toward a buyer’s market.

First-Time Home Buyers: Buying Later, Spending More

The average age of first-time home buyers has risen. Life milestones — marriage, career stability, desire to put down roots — are happening later, and home buying follows those milestones.
Generational wealth transfer is playing a significant role: 70–80% of first-time buyers are receiving financial gifts from family members, particularly grandparents, to help fund their purchase.
Younger generations are prioritizing lifestyle, travel, and flexibility over homeownership. The “digital nomad” mindset and desire for mobility are delaying the decision to buy.
When first-time buyers do purchase, they are often buying at higher price points than previous generations — in some cases purchasing a first home well above $1 million in the Houston market, where more affordable options exist.
Inner-loop Houston apartment rents have risen sharply, making the rent-versus-buy calculation more favorable for ownership than many renters realize.

Pricing and Market Conditions: Are We in a Buyer’s Market?

The short answer: yes, for most of the Houston market.

Suburban markets: Sellers are seeing price reductions of 8–15% before a home sells. Homes are sitting on the market for three to six months or longer. Inventory is well above the three-month threshold that defines a neutral market. Buyer-favorable contract terms are becoming standard.
Inner-city and highly desirable pocket neighborhoods: Some hyper-local areas remain competitive, with buyers routinely offering $100,000 or more over asking price. These pockets operate independently of broader market trends.
Price appreciation outlook for 2026: Houston is expected to see 1–5% appreciation, a significant moderation from the 13–15% annual gains seen during the post-COVID peak, but still positive. Buying still makes financial sense even in a normalized market.
The goal for 2026: Normalization — a balanced market where sellers price realistically, buyers negotiate fairly, and agents can do their jobs without extraordinary circumstances on either side.

Migration Trends and Houston’s Diverse Housing Market

Texas and Houston continue to attract residents from across the country, driven primarily by business relocation and affordability — not a single influx from any one state or region.
Houston’s size and diversity of housing stock — from high-rise urban living to rural outskirts — means the market can absorb a wide range of buyer preferences simultaneously.
Industry diversification is a key stabilizing factor. Houston is no longer solely dependent on oil and gas or the Texas Medical Center. The growth of the commercial space industry — including Ellington Field’s designation as the 14th recognized spaceport and new NASA-related development — is bringing new employers and residents to the region.
Commute time and school access remain the two primary factors driving suburban versus urban purchase decisions for relocating families.
No single dominant migration trend — urban versus suburban, minimalist versus large home — defines the current market. Intentional lifestyle choices are driving individual decisions in all directions.

Real Estate as an Economic Indicator and Wealth-Building Tool

Home equity remains one of the most significant components of household wealth. Even at 1–5% annual appreciation, homeownership builds equity in a way that renting cannot.
Homeownership connects buyers to community, which in turn supports business growth, personal networks, and long-term financial stability.
Generational wealth transfer through real estate is accelerating, with families using gifts to help younger buyers enter the market and using trust structures and estate planning to ensure homes pass effectively to the next generation.
Economic uncertainty in 2025 — driven by headlines around tariffs, policy changes, and market volatility — suppressed buyer and seller activity. In 2026, fatigue from waiting is expected to motivate more people to move forward with purchases and sales they had been delaying.

Pro Tips from Britney and Ashley

One Myth Buyers Should Stop Believing

You do not need to start looking months and months in advance. In a market with strong inventory, buyers who start too early often fall in love with a home they cannot yet buy, or miss out when the right home comes along later. A typical transaction closes in approximately 30 days. The optimal window to begin seriously looking is 60–90 days before your target move date — not sooner. When you’re ready to buy, the inventory is there. Start looking when you’re ready to act.

One Thing Sellers Should Rethink

Pricing. Sellers who enter the market overpriced quickly become stale listings, inviting buyer speculation about what might be wrong with the home. Once a listing sits, it loses momentum that is very difficult to recover. Sellers should:

Listen to their agent’s pricing guidance — agents have a fiduciary duty to get sellers the best result, and overpricing works against that goal.
Consider a pre-listing inspection to identify and address issues proactively, giving buyers confidence and sellers a stronger negotiating position.
Separate emotional attachment to the home from its market value. Personal significance — reclaimed wood from a childhood home, custom finishes — rarely translates to a higher sale price.
Price right from day one and use professional marketing to differentiate the listing.

One Trend That May Surprise People in 2026

Smaller homes. The average square footage of newly built homes has already declined from 2,189 sq ft in 2020 to approximately 2,073 sq ft in 2025 — nearly 120 square feet smaller. Affordability concerns, intentional lifestyle choices, and a broader cultural shift toward minimalism are driving buyers toward smaller, more manageable spaces. This mirrors a larger trend: younger generations are prioritizing experiences and flexibility over square footage and possessions.

Key Takeaways for Listeners

National real estate headlines often do not reflect local market conditions. Houston’s market dynamics are distinct from the national picture — work with a local expert who knows the specific neighborhood, not just the metro area.
Interest rates are near their 40-year historical average. Waiting for rates to return to 3% is not a sound strategy. If the numbers work today, buy today — and refinance later if rates fall further.
Houston is broadly in a buyer’s market, but highly desirable pocket neighborhoods remain competitive. Know which type of market you are buying or selling in.
Affordability is about more than the interest rate. Insurance costs and MUD taxes are significant ongoing expenses that buyers must factor into their total housing budget.
Generational wealth transfer is actively shaping the first-time buyer market. If you are helping a family member buy a home, coordinate with both your financial advisor and estate planning attorney to structure the gift correctly.
If you have been waiting to buy or sell, 2026 may be the year to stop waiting. Economic uncertainty fatigue is real — and so is the cost of inaction.

Resources

Steel Door Group at Martha Turner Sotheby’s International Realty: marthaturnersothebysrealty.com
Royal Harbor Partners Wealth Management: royalharborpartners.com

Disclaimer

Royal Harbor Partners is a registered investment advisor. The opinions expressed on this show are their own. Registration as an investment advisor does not imply a certain level of skill or training. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such. Any statements or opinions are subject to change without notice. The information presented is for educational purposes only and does not constitute an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated are not guaranteed. The information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment advisor to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.

Market Talk Episode 47: Understanding Medicare — A Guide to Your Options with Brian Hickey

Host: Natalie Picha, Chief Experience Officer and Partner, Royal Harbor Partners Wealth Management
Guest: Brian Hickey, Vice President, Medicare Back Office
Topic: Medicare enrollment windows, plan options, common mistakes, prescription drug coverage, and the Medicare tax surcharge

Guest Bio

Brian Hickey is Vice President of Medicare Back Office and has been in the insurance industry since 1997 — nearly 30 years. He began his career at Mutual of Omaha after graduating from college and quickly discovered how much guidance people needed navigating the complexity of insurance, particularly Medicare. He has spent the majority of his career focused exclusively on Medicare planning, helping individuals understand and actively manage one of the most confusing aspects of retirement.

Key Topics Covered

“I’m Still Working and I Love My Insurance — Do I Have to Switch to Medicare at 65?”

This is one of the most common questions people approaching 65 ask. The short answer: it depends on your situation, and you should compare your options before assuming your employer coverage is better or cheaper.

Medicare Part A (hospital insurance) is automatic at 65 if you are already receiving Social Security benefits, and it is typically premium-free if you have worked at least 10 years (40 quarters). You should generally enroll in Part A even if you continue working.
Medicare Part B (doctor’s insurance) can be delayed without penalty if you are still working and covered by an employer group plan. However, do not automatically assume your employer coverage is better or less expensive than Medicare — compare them side by side before deciding.
If you are not yet receiving Social Security, you must actively apply for Medicare Part A through Social Security.

Health Insurance Options at Age 65

When you become eligible for Medicare, you have several paths:

Stay on employer group coverage (if still working and eligible)
Original Medicare only (Parts A and B) — not recommended. While you have paid into Medicare through payroll taxes, Original Medicare alone leaves significant gaps: deductibles, co-pays, co-insurance, and no out-of-pocket maximum. A catastrophic health event could be financially devastating.
Original Medicare plus a supplemental plan — either a Medicare Supplement (Medigap) or a Medicare Advantage plan, plus separate coverage for dental, vision, hearing, and prescription drugs as needed.

Medicare Supplement (Medigap) vs. Medicare Advantage

Medicare Supplement (Medigap)

Think of it as paying up front for your healthcare. Monthly premiums are higher — typically $100–$300 per month depending on age, plan, and location.
In exchange, there are no co-pays, no co-insurance, and no provider networks. As long as your provider accepts Medicare, you can see them regardless of location.
Standardized benefits: Plan G from Mutual of Omaha has the exact same benefits as Plan G from UnitedHealthcare. The difference between carriers is price and rate history, not benefits.
Does not cover dental, vision, hearing, or prescription drugs — those require separate policies.
Premiums vary by zip code. Insurance companies pool insureds by zip code, so claims experience in your area affects your rate.
Rate history matters: some carriers enter the Medicare market with very low premiums, attract large enrollment, then raise rates 20–30% annually because they underestimated claims. Research a carrier’s rate history before enrolling.
Can typically be changed any time of year — not limited to open enrollment.

Medicare Advantage

Think of it as paying as you go. Premiums are typically lower — sometimes $0 — but you pay co-pays and co-insurance when you use services.
Structured similarly to employer group coverage: provider networks, co-pays, co-insurance, and a maximum out-of-pocket limit.
Plan availability and pricing are determined by county, not zip code. Carriers may enter or exit a county from one year to the next based on their claims experience.
No medical underwriting: you can enroll regardless of your current health status.
Currently, approximately 53–54% of Medicare-eligible individuals are enrolled in a Medicare Advantage plan — up from the minority five years ago.
Must be actively reviewed each year, as benefits, networks, and costs change annually.

“One size doesn’t fit all, especially in the Medicare marketplace. We hear constantly, ‘my neighbor has X, Y, and Z and I think that’s what I should have’ — and quite often that’s not the case.”
— Brian Hickey

Medicare Enrollment Windows and Deadlines

Initial Enrollment Period (IEP)

A seven-month window surrounding your 65th birthday:

3 months before your birth month
Your birth month
3 months after your birth month

Example: If your birthday is August 15th, your Initial Enrollment Period runs from May 1st through November 30th. You can enroll in Medicare as early as May 1st with no penalties.

General Enrollment Period (GEP)

If you miss your Initial Enrollment Period, you can enroll January 1st through March 31st each year. Coverage begins February 1st. Penalties may apply if no qualifying exception exists.

Annual Open Enrollment Period

Runs October 15th through December 7th each year.
Applies to Medicare Advantage and Medicare Part D (prescription drug) plans only.
This is when plans for the following calendar year are reviewed and changes can be made.
Plan details are typically not available until early October, creating a compressed decision-making window.
Does not apply to Medicare Supplement plans — those can be changed at any time of year. This is a common source of confusion, partly driven by TV advertising during open enrollment season.

The Six-Month Medigap Open Enrollment Window

This is one of the most important and least understood deadlines in Medicare:

Within the first six months after enrolling in Medicare Part B, insurance carriers cannot ask health questions or deny you a Medicare Supplement plan for any reason.
After that six-month window closes, carriers can medically underwrite you and may deny coverage based on your health history.
Medicare Advantage plans do not have this restriction — you can enroll regardless of health status.
If you have health issues and miss this window, you may be temporarily or permanently ineligible for Medicare Supplement coverage.

Medicare Part D: Prescription Drug Coverage

Part D plans change every year. Premiums, formularies (covered drugs), and cost-sharing for specific medications are all subject to change on January 1st.
Every fall, carriers send an Annual Notice of Change (ANOC) outlining what is different about your plan for the coming year. Read this notice carefully.
A medication that cost $5 as a generic co-pay one year may move to preferred brand-name status the next year, costing significantly more.
Failing to review and update your Part D plan annually can result in being locked into a plan with substantially higher drug costs for the entire calendar year.

Critical warning about skipping Part D: If you turn 65, are healthy, take no medications, and choose not to enroll in a Part D plan, you are taking a significant financial risk:

If you are later diagnosed with a condition requiring expensive medication, you must pay out of pocket until December 31st and cannot enroll in a new Part D plan until the next open enrollment period.
A $30–$35 monthly Part D premium is a small cost compared to the potential out-of-pocket exposure of a high-cost prescription drug without coverage.
Delaying Part D enrollment without a qualifying exception results in a permanent late enrollment penalty added to your monthly premium for as long as you have Part D coverage.

Common Medicare Mistakes

Delaying Part B when you should not, or failing to delay it when you should. This decision is highly individual and depends on your employment status, employer plan quality, and long-term plans. Getting it wrong has lasting financial and coverage consequences.
Enrolling in Part B without realizing the Medigap six-month window has started. If you enroll in Part B unintentionally and have health issues, you may lose your guaranteed-issue right to a Medicare Supplement plan.
Taking a neighbor’s or friend’s advice about which plan to choose. Every person’s health, medications, providers, and financial situation are different. What works for someone else may be the wrong choice for you.
Generalizing from a bad experience with one carrier to an entire plan type. A negative experience with one Medicare Advantage carrier does not mean all Medicare Advantage plans are poor. Evaluate each plan on its own merits.
Failing to review your plan annually. Both Medicare Advantage and Part D plans change every year. Not reviewing during open enrollment can result in significantly higher costs or loss of coverage for your medications or providers.
Skipping Part D because you are currently healthy. The late enrollment penalty is permanent, and the financial risk of being uninsured for a high-cost prescription is substantial.

The Medicare Tax Surcharge (IRMAA)

Higher-income Medicare enrollees pay more for Parts B and D through a surcharge known as IRMAA (Income-Related Monthly Adjustment Amount). The more you earn, the higher your premium.

Surcharge amounts are determined by your adjusted gross income (AGI) from two years prior and vary based on your tax filing status (individual vs. married filing jointly).
The intent is to help sustain Medicare’s long-term financial viability as healthcare costs rise.
This is a factor worth planning around: significant income events — Roth conversions, asset sales, required minimum distributions — can push income into a higher IRMAA bracket in a given year. Coordinate with your financial advisor before triggering large income events.

When Should You Start the Medicare Conversation?

The traditional guidance was to start three months before your 65th birthday — the beginning of your Initial Enrollment Period. That timeline has shifted:

Medicare Back Office is now seeing people reach out at age 64 — a full year before eligibility — simply to understand their options and begin planning.
Prices and plan details will change by the time you turn 65, but having a general understanding of the landscape well in advance reduces stress and improves decision-making.
The earlier you engage with a Medicare specialist, the better positioned you are to avoid the costly mistakes outlined above.

Key Takeaways for Listeners

Original Medicare alone is not sufficient coverage for most people. Supplement it with either a Medigap plan or a Medicare Advantage plan.
The decision between Medicare Supplement and Medicare Advantage is highly individual — driven by your health, medications, preferred providers, financial situation, and risk tolerance. Do not let a neighbor’s plan make the decision for you.
The six-month Medigap open enrollment window after Part B enrollment is one of the most important deadlines in Medicare. Missing it can permanently affect your ability to get Medicare Supplement coverage.
Medicare must be actively managed every year — it is not a set-it-and-forget-it decision. Review your Part D and Medicare Advantage plans every open enrollment season.
Never skip Part D because you are currently healthy. The late enrollment penalty is permanent, and one expensive diagnosis can create enormous out-of-pocket costs.
Higher earners should coordinate Medicare planning with their financial advisor to anticipate and manage IRMAA surcharges.
Start the Medicare conversation earlier than you think you need to — ideally a full year before your 65th birthday.

Resources

Medicare Back Office: Contact for a personalized Medicare review and plan comparison
Royal Harbor Partners Wealth Management: royalharborpartners.com

Disclaimer

Royal Harbor Partners is a registered investment advisor. The opinions expressed on this show are their own. Registration of an investment advisor does not imply a certain level of skill or training. All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such. Any statements or opinions are subject to change without notice. The information presented is for educational purposes only and does not constitute an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated are not guaranteed. The information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment advisor to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.