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Zach Abraham

5 Things You Need to Know About the SECURE Act

By | News, Retirement, Tax Planning

The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE) became effective Jan. 1, 2020, and many people have questions about it. Here are the top five things consumers should know.


  1. 72 is the new 70½

The SECURE Act raises the age at which retirees must begin taking Required Minimum Distributions from the awkward age of 70-1/2 to an even age 72, allowing for a couple more years of growth before RMDs kick in. NOTE: Anyone who reached age 70-1/2 in 2019 or before is subject to the old rules.


  1. You can keep making contributions to traditional IRAs

The act repeals the age limitation for making contributions to traditional IRAs, as long as you have earned income. Previously, the maximum age for traditional IRA contributions was set at 70-1/2 (this was the only type of retirement account which had an age limitation). Now, those working into their 70s and beyond can continue contributing to their traditional IRAs, even if they’re simultaneously required to begin drawing them down.


  1. The stretch IRA is dead

While existing “stretch IRAs” are grandfathered in and still follow the old tax rules, stretch IRAs are unlikely to be used by financial and estate planners in the future because their tax advantages have been drastically reduced.

Prior to the new law, stretch IRAs were primarily used for estate planning because they allowed a family to extend distributions over future generations—while the IRA itself continued to grow tax free. The person inheriting an IRA was required to take RMDs based on their life expectancy, which meant that a very young beneficiary could stretch out their distributions potentially over their lifetime.

Now beneficiaries must draw down the entire account within 10 years of inheriting it, possibly throwing them into a higher tax bracket. (They can take the money out in any year or years they like, as long as the account is empty by 10 years of the date of death of the original account owner.)

The new 10-year rule also applies to inherited Roth IRAs.

You may want to review your plan if you have stretch IRAs set up for your family, because any IRA inherited as of January 1, 2020 is subject to the new rules. Trusts you may have put in place to take advantage of stretch IRA rules probably won’t ameliorate taxes anymore either.

Keep in mind that the act does provide for a whole class of exceptions who aren’t subject to this 10-year rule; for them, the old distribution rules still apply. These beneficiaries (referred to as “Eligible Designated Beneficiaries”) are:

  • Spouses
  • Disabled beneficiaries
  • Chronically ill beneficiaries
  • Individuals who are not more than 10 years younger than the decedent
  • Certain minor children (of the original retirement account owner), but only until they reach the age of majority. NOTE: At this time, minor children would appear to be ineligible for similar treatment if a retirement account is inherited from a non-parent, such as a grandparent.


This new law is clearly designed to raise taxes. According to the Congressional Research Service, the lid put on the Stretch IRA strategy by the new law has the potential to generate about $15.7 billion in tax revenue over the next 10 years!


  1. The Roth got more attractive

Because contributions to Roth IRAs are made on an after-tax basis, a Roth account owner is not subject to Required Minimum Distributions at any age. An owner can leave their Roth to grow until their death, leave it to their spouse, who can then allow it to grow until they die. The second spouse can leave it to their children, who can then allow it to continue to accumulate tax-free for another 10 years, although they will now have to empty the account by the 10-year mark.

In terms of estate planning, Roth IRAs typically do not cause a taxable event when distributions are taken by a beneficiary.

Low individual tax rates by historical standards and a pending reversion in 2026 to the higher income tax brackets/rates that preceded the Tax Cuts and Jobs Act (TCJA) of 2017 can make this an opportune time for Roth conversions for those over age 59-1/2. These can benefit you, your spouse and heirs by strategically moving taxable retirement funds into tax-free Roth retirement accounts. The most common strategy for Roth conversions is ‘bracket-topping,’ where you convert enough to go to the edge of your tax bracket.

Keep in mind that these conversions need to be planned and done carefully, as they can no longer be reversed.

Remember, any account can be set up as a Roth – including CDs, government bonds, mutual funds, ETFs, stocks, annuities—almost any type of investment available.


  1. Other non-retirement related provision highlights:
  • You can use $5,000 of qualified money for childbirth or adoptions
  • 529 plan-approved “Qualified Higher Education Expenses” now include expenses for Apprenticeship Programs—including fees, books, supplies and required equipment—provided the program is registered with the Department of Labor
  • 529 plans can also be used for “Qualified Education Loan Repayments” to pay the principal and/or interest of qualified education loans limited to a lifetime amount of $10,000, retroactive to the beginning of 2019
  • The Kiddie Tax rules changed by the Tax Cuts and Jobs Act (TCJA) of 2017 have been reversed, (and can be reversed for the 2018 tax year as well)
  • The AGI (Adjusted Gross Income) “hurdle rate” to deduct qualified medical expenses remains lower at 7.5% of AGI for 2019 and 2020.
  • The following tax benefits for individuals are reinstated retroactively to 2018, and made effective onlythrough 2020 at this time:
    • The exclusion from gross income for the discharge of certain qualified principal residence indebtedness
    • Mortgage insurance premium deduction
    • Deduction for qualified tuition and related expenses


There are even more provisions of the SECURE Act designed to make it easier for small business owners to offer retirement plans to employees, as well as add annuities to their plans.


Call us if you would like to discuss how the new changes will affect your financial plan. You can reach Bulwark Capital Management in Tacoma, Washington at 253.509.0395.


The SECURE Act is a complex new law still being analyzed and assessed by industry experts. IRS clarifications may follow. The information in this article is provided for general information and educational purposes only. It is not designed nor intended to be applicable to any person’s individual circumstances. It should not be considered investment advice, nor does it constitute a recommendation that anyone engage in or refrain from a particular course of action.
Do not rely on this information for tax advice. Check with your CPA, attorney or qualified tax advisor for precise information about your specific situation.

The Rules Are Changing For 401(k)s In 2020

By | Financial Literacy, Retirement

The Rules Are Changing For Your 401(k) In 2020

If you’re still working and contributing to a 401(k) or similar workplace retirement plan, there is some good news for the upcoming year.

If you’re under age 50, the amount you can contribute to your 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is now $19,500 for 2020—a $500 increase over 2019. Additionally, for those who are age 50 or over by December 31, 2020, the catch-up amount is now $6,500, up by $500 (and the first increase since 2015).

Keep in mind that you can still put away an additional $6,000 in an IRA—$7,000 for those age 50 or older. As always, these contributions can be made up until tax day, April 15, for the previous year’s taxes. That plus the new limits mean that an employee who is 50+ can sock away a total of $33,000 in tax-advantaged retirement accounts for 2020.

For Business Owners

For self-employed small business owners, the amount that can be saved in a SEP IRA or a solo 401(k) goes up from $56,000 to $57,000 in 2020, if all requirements are met. The limit on SIMPLE retirement accounts goes up from $13,000 to $13,500 in 2020 (plus $3,000 if you’re 50+). For defined benefit plans—similar to pensions of the past, but now used by high-earning self-employed individuals—the limit on the annual benefit goes up from $225,000 in 2019 to $230,000 in 2020.

Hardship Withdrawal Rule Changes

Even though making hardship withdrawals from 401(k) and 403(b) retirement plans will be easier for plan participants in 2020, for most employees, withdrawals should be a last-ditch option if you’re facing financial hardship. This is true especially if you’re under age 59-1/2, when you have to pay taxes plus a 10% tax penalty on the amount withdrawn.

However, it will be easier to start to saving again following a hardship withdrawal. Prior to 2020, employees who took a hardship withdrawal were barred from making new contributions to their plans for six months. Starting January 1st, this is no longer the case.

Also in 2020, employees can withdraw earnings, profit-sharing and stock bonuses rather than just their contribution amounts for 401(k) hardship withdrawals. (NOTE: 403(b) plan participants are still limited to just their contributions.)

Starting in 2020, your employer gets to decide whether you have to take a plan loan first—requiring payback with interest—before taking a hardship withdrawal; it’s no longer mandated by the government, it’s optional. Remember, taking a loan rather than a hardship withdrawal is almost always your best choice to keep your retirement on track.

Hardship Verification and Disaster Relief Rules

Hardship verification standards have been eased; an employer or retirement plan administrator is not required to determine if a hardship withdrawal is necessary by checking cash or assets available—the burden is on the employee to certify that it is.

To take a hardship withdrawal, employees must have an immediate and heavy financial burden or need that includes one or more of the following:

  1. Purchase of a primary residence.
  2. Expenses to repair damage or to make improvements to a primary residence.
  3. Preventing eviction or foreclosure from a primary residence.
  4. Post-secondary education expenses for the upcoming 12 months for participants, spouses and children.
  5. Funeral expenses.
  6. Medical expenses not covered by insurance.

In 2020, a seventh category has been added for expenses resulting from a federally declared disaster in an area designated by FEMA; the agency will no longer need to issue special disaster-relief announcements to permit hardship withdrawals to those affected.


If you have any questions about the new rules for 401(k)s and similar retirement savings plans, please call us! Our mission is to help you achieve your personal financial and retirement goals.

Call Bulwark Capital Management at 253.509.0395.




Should Interest Rates Remain Low?

By | Bonds, Interest Rate Risk

Federal Reserve Board Chair Jerome Powell and other Fed officials recently asserted there was “no need to change to rates any time soon.” The minutes of the recent Federal Open Market Committee meeting on November 18 offered some details. Two Fed presidents — albeit hawks — stated their position that rates should remain at the current 1 . 50% to 1 . 75% range.

Federal Reserve Bank of Boston President Eric Rosengren, who dissented on the three recent rate cuts, reiterated his concern about low rates in a Bloomberg interview and ruled out negative rates, even if a recession occurs.

Federal Reserve Bank of Cleveland President Loretta Mester said in a talk the panel can take a wait-and-see approach before deciding its next move.

In testimony before Congress, Powell stated “the current stance of policy is likely to remain appropriate as long as the data supports,” he said. “Powell also indicated that a push to raise rates would likely require ‘serious’ inflation,” which is not expected.

The asked Zach Abraham, in addition to other leading financial experts, what he thought of the Federal Reserve’s recent remarks.

“The Fed is watching the markets,” noted Zach Abraham, Principal/Chief Investment Officer at Bulwark Capital Management. “91% of household wealth is in financial assets and 8% is in real assets. When you consider the fact that the wealthiest and largest generation in our nation’s history is retiring en masse and now relying on said financial assets to replace income, the market is the economy,” he said.

While market pullback late last year was attributed “to decreased consumer spending in the fourth quarter, in reality, consumer spending dipped 8% BECAUSE the market dropped 20% in 2 months.”

Read the entire article here:


The is designed for municipal finance professionals, bond issuers, government officials, investors and other decision makers in the municipal bond industry; the website receives nearly 59,000 unique visitors per month. It provides breaking news, analysis and data regarding all areas of municipal finance. The site features news on the national as well as regional levels, and it contains market statistics, graphs, charts, photos and weekly indices.

Did the Fed and the White House Come to a Meeting of the Minds?

By | Bonds, Investments, Stock Market

On November 18, President Donald Trump invited Federal Reserve Board Chair Jerome Powell to meet at the White House with him and Treasury Secretary Steve Mnuchin. Afterwards Trump tweeted, “Just finished a very good & cordial meeting at the White House with Jay Powell of the Federal Reserve. Everything was discussed including interest rates, negative interest, low inflation, easing, Dollar strength & its effect on manufacturing, trade with China, E.U. & others, etc.”

While the Fed released a statement saying that the meeting covered “the economy, growth, employment and inflation,” the Fed said Powell’s remarks “were consistent” with those he made at last week’s congressional hearings. “[Powell] did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming information that bears on the outlook for the economy.” Powell told the president that monetary policy decisions will be “based solely on careful, objective and non-political analysis,” the statement said.

Zach Abraham, principal/CIO at Bulwark Capital Management, told reporters at the that, “This is simply a case of Trump throwing everything at the Fed but the kitchen sink. If we really want to keep China in check, the Fed and the White House must be on the same page. Beijing and the PBOC have strategically exploited Fed Independence and the inherent lag between monetary policy and economic reality on the ground.

“I’d assume Trump is merely trying to close this gap and make nice with Powell as he’s realized the need to be on the same page. I just don’t think the White House has realized that lower U.S. rates and a lower dollar are precisely what Beijing wants,” said Abraham.

Read the entire article here:


The is designed for municipal finance professionals, bond issuers, government officials, investors and other decision makers in the municipal bond industry; the website receives nearly 59,000 unique visitors per month. It provides breaking news, analysis and data regarding all areas of municipal finance. The site features news on the national as well as regional levels, and it contains market statistics, graphs, charts, photos and weekly indices.

How Will Lower Interest Rates Affect the Bond Market?

By | Bonds, Investments, Stock Market

On October 31, along with other financial industry experts,  Zach Abraham, Principal and Chief Investment Officer for Bulwark Capital Management was asked to weigh in regarding the Federal Reserve’s recent lowering of interest rates.

At that time, Federal Reserve Board Chair Jerome Powell had just made it clear the Fed expected to keep rates at a range of 1.50% to 1.75% unless events resulted in a “material reassessment” of the Fed’s outlook.

“While the rate cut certainly means that yields on treasuries are headed lower, it may not be so for the rest of the bond market,” said Zach Abraham, principal/CIO at Bulwark Capital Management.

“At some point in this cycle we will see spreads blow out. It’s inevitable, as it occurs in every cycle. Flight to safety puts a bid under treasuries while corporates are shunned as weakening economic fundamentals raise risks, or at least perceived risks, of corporate defaults.”

He called Powell’s claim that the Fed is on pause “a bit humorous.” The Fed trimmed the rate target by 75 basis points in the past three meetings and “launched a $100 billion standing repo facility (just quantitative easing by another name). It’s time we all face the facts. The Fed has a tiger by the tail and has no clue how to let go,” Abraham said. “Investors, as well as the market, are beginning to figure this out. Barring some exogenous/inflationary shock, we’re headed back to the zero bound.”

Read the entire article here:


The is designed for municipal finance professionals, bond issuers, government officials, investors and other decision makers in the municipal bond industry; the website receives nearly 59,000 unique visitors per month. It provides breaking news, analysis and data regarding all areas of municipal finance. The site features news on the national as well as regional levels, and it contains market statistics, graphs, charts, photos and weekly indices.



Does Your Retirement Plan Include Inflation Risk?

By | Inflation Risk, Retirement

Inflation may not always be top of mind when you think about planning for retirement. Of course, you will likely consider your current expenses, but you need to account for what the costs of those expenses could be over time.

None of us can predict the future, but we can plan. Inflation diminishes purchasing power over the years and increases the costs of services that retirees and pre-retirees need. Given that more Americans are living longer, it can pay dividends to include inflation risk in your overall planning.

The other issue we have to contend with when it comes to inflation is that we may be lulled into a false sense of security since government measures of inflation have been very low in recent years. In addition, safer investments like money market funds, CDs and government bonds generally yield less than the cost of goods and services that many of us need. This makes it difficult for our safe money investments to keep pace with our expenses.

Lower government inflation measures also have an impact on Social Security benefits. Among the features of Social Security is that benefits are generally adjusted each year for inflation in what is known as a cost-of-living adjustment, or COLA. In October, the Social Security Administration announced a 1.6% COLA that takes effect in December for some beneficiaries and by January for most.

The average benefit increase for retired workers with the recently announced COLA is estimated to be $24 to $1,503 per month. Married couples both receiving benefits will see a $40 increase, on average, to a monthly payment of $2,531. The cost-of-living adjustment for 2020 is lower than that of 2019, which was 2.8%, and 2018, which was 2.0%.

Getting the most out of your Social Security benefit is extremely important for your retirement and it’s nice to have a feature that steps up with inflation. However, adjustments tracking official government statistics likely won’t cover the higher expenses you will face throughout retirement, so planning is important.

Health Care and Medical Cost Inflation

Then there is health care, among the biggest costs you may encounter in retirement and even now if you are still working and saving for retirement. Medical cost inflation is real and it can negatively impact your savings if you don’t have a way to offset it.

The Centers for Medicare & Medicaid Services (CMS) estimated earlier this year that health expenditures are projected to increase 4.8% overall in 2019, up from 4.4% growth in 2018.

For those still working and covered by an employer’s plan, costs are outpacing wages and inflation. Since 2009, the Kaiser Family Foundation says average family premiums have increased 54% and workers’ contributions have increased 71%, several times more quickly than wages (26%) and inflation (20%).

If you are already enrolled in Medicare and have been incurring out-of-pocket expenses then you know the impact of what higher drug costs or services that Medicare doesn’t cover can do to your monthly budget. We often cite figures from Fidelity Investments, estimating that a 65-year old couple retiring in 2019 can expect to spend $285,000 in today’s dollars for health care and medical expenses throughout retirement. The figure doesn’t include long-term care.

Once you have an idea of what your expenses are, we can get started now on developing or updating your plan to account for inflation. The other thing to keep in mind is that while inflation has been low in the past decade, it is best to plan using higher long-term averages.

There are several ways we can address inflation risk, depending on your situation. Strategies and options could include how your investments are positioned over time and guaranteed income solutions that adjust periodically to keep pace with inflation. You will want to meet with us, too, for a plan to cover long-term care as these costs can be a significant financial risk. Now is also a good time to contact us to discuss Medicare because the current open enrollment period runs through December 7 if you want to make changes or switch plans.

Let us know how we can help!

Contact Bulwark Capital Management at 253.509.0395.


“Social Security Announces 1.6 Percent Benefit Increase for 2020,” October 10, 2019. Social Security Administration. Retrieved from:
“National Health Expenditure Projections 2018-2027,” February 2019. Centers for Medicare & Medicaid Services. Retrieved from:
“Benchmark Employer Survey Finds Average Family Premiums Now Top $20,000,” September 25, 2019. Kaiser Family Foundation. Retrieved from:
“How to plan for rising health care costs,” April 1, 2019. Fidelity Investments. Retrieved from:

The IRA Had a Birthday Last Month

By | Retirement

The IRA can provide many gifts as part of a comprehensive retirement plan.

The Individual Retirement Account (IRA) turned 45 on Labor Day. On September 2, 1974, the Employee Retirement Income Security Act, or ERISA, was enacted into law, introducing broad safeguards to protect employee savings in both defined benefit plans like pensions, and defined contribution plans.

The intent of Congress in initially establishing IRAs was to provide a tax-advantaged retirement savings plan for those workers at businesses that weren’t able to offer pensions. The IRA also made it possible to preserve the tax-deferred status of qualified plan assets when an employee changed jobs or retired, paving the way for rollovers.

It was still several years before the 401(k) plan would arrive, not through legislation, but rather a private letter ruling from the Internal Revenue Service (IRS). However, the 1974 act would benefit 401(k)s through the flexibility of rollovers.

Today, the IRA plays a vital role for Americans saving for retirement. IRA assets totaled $9.4 trillion at the end of March 2019, representing nearly one-third of the $29.1 trillion U.S. retirement market. Assets held in IRAs have been growing at an annual average pace of 10% over the past 25 years, from $993 billion in 1993, according to the Investment Company Institute (ICI).

Millions of Americans use IRAs to save for retirement. An estimated 42.6 million U.S. households, or 33.4%, owned IRAs as of mid-2018. An estimated 33.2 million households owned traditional IRAs, making it the most common type of IRA. A total of 22.5 million households owned Roth IRAs, and 7.5 million U.S. households owned employer-sponsored IRAs such as Simplified Employee Pension (SEP) IRAs and Savings Incentive Match Plan for Employees (SIMPLE) IRAs, according to the ICI.

The types of IRAs have expanded since 1974. SEP IRAs were created in 1978 to offset concerns that complex regulations were preventing smaller businesses from offering retirement plans. SIMPLE IRAs were created in 1996 specifically for employers with 100 or fewer employees.

The popular Roth IRA came into being as part of the Taxpayer Relief Act of 1997, enabling retirement savers with the option of contributing on an after-tax basis, and the ability to take tax-free withdrawals, so long as they qualify with IRS rules. However, Roth IRA contribution limits and eligibility are based on your modified adjusted gross income, or MAGI. For 2019, that means only single Americans with a MAGI of $135,000 or less may invest in a Roth IRA; while the MAGI limit for married Americans is $199,000.

The Roth IRA can be a beneficial tax-planning tool. While the traditional IRA offers tax-deferred savings benefits, it can have a downside. Once you reach age 70½, IRS rules require you to begin withdrawing from these accounts through Required Minimum Distributions (RMDs). But Roth IRAs – which have accumulated more than $800 billion in assets since first becoming available in 1998 – allow you to potentially garner their tax advantages through conversions.

In a conversion, taxes are paid on any pre-tax assets in a traditional IRA or 401(k)-like plan (if you qualify) that are moved into a Roth. In 2010, income limits were lifted on conversions so, these days, you can convert your IRA assets to a Roth regardless of your income or marital status. However, it’s important to do these conversions carefully, because as of 2018, they are no longer reversible (called a recharacterization.)

Now is the time to give us a call, if you have tax-deferred retirement accounts and are concerned that RMDs could bump you into a higher tax bracket in the future. It’s a good idea to begin tax planning several years before retirement and keep your tax bill low with periodic checkups on your interest income, potential capital gains and losses, and other tax planning needs. This way, we can help you minimize a portion of the taxes you may have to pay.

Lack of knowledge is the biggest obstacle preventing Americans from investing in an IRA. According to a LIMRA Secure Retirement Institute (LIMRA SRI) study published in early 2019, only 34% of Americans believe they are knowledgeable about IRAs. Men are far more likely to say they are knowledgeable about IRAs than women. Forty-two percent of men consider themselves knowledgeable about IRAs, compared with just 27% of women. Of those who don’t own an IRA, nearly half (46%) felt they did not understand enough about IRAs to contribute to them.

When it comes to retirement planning, everyone can use a helping hand. It doesn’t hurt from time to time to get an external check on how you’re progressing toward your financial goals. Whether it’s what investment options might make sense for your traditional IRA, tax planning, Roth IRA conversions, guidance on saving for retirement or an income plan you can’t outlive, we’re here whenever you need us!

Call Bulwark Capital Management headquartered in Tacoma, Washington at 253.509.0395



“Happy Birthday, IRA! Congratulations on 45 Years,” September 12, 2019. Sarah Holden and Elena Barone Chism. Investment Company Institute. Retrieved from:
“Frequently Asked Questions About Individual Retirement Accounts (IRAs),” June 2019. Investment Company Institute. Retrieved from:
“This is your last chance ever to reverse a Roth IRA conversion,” March 2018. MarketWatch. Retrieved from:
“LIMRA Secure Retirement Institute: Only 34 Percent of Americans Are Confident in their IRA Knowledge,” February 27, 2019. LIMRA Secure Retirement Institute. Retrieved from:

Annual Medicare Open Enrollment Begins October 15 and Runs Through December 7

By | Health Care, Medicare | No Comments

If you’re already enrolled in Medicare it may be time to evaluate your current coverage, make changes or switch plans during the open enrollment period from October 15 through December 7. If you have a Medicare Prescription Drug Plan, and are considering making changes from Original Medicare (Parts A and B) to a Medicare Advantage Plan, or vice versa, now is your chance to make changes or enroll.

Medicare health and drug plans are allowed to make changes to their offerings each year, including changes to costs, coverage, and what pharmacies and providers are in their network. If they no longer meet your requirements, during the Open Enrollment Period you can change Medicare health plans and prescription drug coverage for the following year. Changes made during Open Enrollment (also known as the Annual Enrollment Period) are effective for coverage as of January 1, 2020.

During Open Enrollment you can:

  • Switch from Original Medicare to a Medicare Advantage plan, and vice versa
  • Switch from one Medicare Advantage plan to another
  • Switch from one Part D plan to another
  • Change from a Medicare Advantage plan that doesn’t offer prescription drug coverage to one that does, and vice versa

You can also join a Prescription Drug (Part D) Plan for the first time if you missed your personal deadline for signing up. Or, you can drop your Part D coverage altogether.*

Do I Need to Change Plans?

If you’re enrolled in a Medicare health or prescription drug plan, review the materials that your plan sent you like the “Annual Notice of Change” (ANOC). If your plan is changing, be sure that it still meets your needs for the following year. If it doesn’t, now is the time to review your plan so that you’re satisfied with the level of care and coverage your receiving. Also, consider if your health has changed, if you may need additional care in the coming year, or if your premiums and out-of-pocked expenses are too high.

Since health care and drug expenses make up a good portion of a retiree’s budget and the budget of those close to retiring, we are available to answer your questions and help you with your options. Drug costs may differ substantially depending on the drug plan, so we suggest you review your current plan against others to see which offers the lowest out-of-pocket expenses for the particular brand-name and generic drugs, if any, that you use.

Among this year’s changes for 2020 is the closing of the coverage gap, or donut hole, for generic drugs. The gap was closed in 2019 for prescription drugs.

Here’s how the coverage gap works, according to Medicare. After you and your drug plan have spent a certain amount of money for covered drugs, you may have to pay more for your prescription drugs up to a certain limit. In 2019, once you and your plan have spent $3,820 on covered drugs, you’re in the coverage gap (this amount may change each year, and Medicare has yet to announce any changes).

Once you reach that coverage gap, you’ll have to pay 25% of your out-of-pocket costs for brand-name and generic drugs. You continue to pay those costs until you reach the threshold for catastrophic coverage, which for 2019 is $5,100 (again, this could change for 2020). Once you hit that limit you have to pay no more than 5% of your drug costs for the rest of the year.

Other changes to the Medicare program coming in 2020 are to Medigap plans (Medicare supplemental insurance). In general, Medigap policies are sold by private insurance companies and cover some of the health care costs that Medicare doesn’t, including co-payments, coinsurance and deductibles. They are standardized plans that must provide the same basic benefits, but some offer additional benefits and premiums vary.

For 2020, Medigap plans sold to new people with Medicare won’t be allowed to cover the Part B deductible. Because of this, Plans C and F will no longer be available to people new to Medicare starting on January 1, 2020. If you already have either of these two plans (or the high deductible version of Plan F) or are covered by one of these plans before January 1, 2020, you’ll be able to keep your plan. If you were eligible for Medicare before January 1, 2020, but not yet enrolled, you may be able to buy one of these plans.


The Open Enrollment Period doesn’t apply if you’re new to Medicare.

If you are 65 or older or turning 65 in the next three months and not already getting benefits from Social Security you should sign up for Medicare Parts A and B, unless you are working for a company with 20+ employees.

*If you don’t elect to get Part D coverage when you are first eligible, you may have to pay more to get this coverage in the future.


Medicare is an important part of retirement. Let’s discuss your retirement plan. Contact Bulwark Capital Management at 253.509.0395




“What actions can I take during Medicare open enrollment each year?” AARP.
“Closing the Coverage Gap—Medicare Prescription Drugs are Becoming More Affordable,”, The Official U.S. Government Site for Medicare.
“How to compare Medigap policies,”, The Official U.S. Government Site for Medicare.


Congress Looks to Provide More Options for Retirement Savers

By | Retirement, Tax Planning

While changes to traditional IRAs, RMDs offer some benefits, there are tradeoffs.


Broad proposals are in the works in the retirement savings arena to ease rules on tax-deferred savings vehicles, make it easier for employers to offer 401(k)-type savings plans and also convert balances into annuities for lifetime income.

In late May, the House of Representatives overwhelmingly passed the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE). Key provisions within the SECURE Act offer more flexibility for when distributions would have to be taken out of tax-deferred accounts. On the flip side, the Act takes direct aim at estate planning strategies that enable heirs of traditional IRAs to stretch out those payments throughout their lifetimes.

In addition to the SECURE Act, there are other legislative proposals winding their way in the Senate, known as the Retirement Enhancement and Savings Act of 2019 (RESA), and the Retirement Security and Savings Act of 2019 (RSSA).

The SECURE Act would repeal the age cap for contributing to a traditional individual retirement account (IRA). Currently, if you have a traditional IRA you aren’t able to contribute to it after age 70½. That is different from Roth IRAs, which don’t have age caps, though the amount you can contribute begins to be phased out above $122,000 for single filers and $193,000 for married, joint filers.

The act would increase the starting age for required minimum distributions (RMDs) to 72, up from 70½. This provides an additional 18 months of tax-deferred growth for tax-qualified plans. It also could mean a higher RMD if you were to leave that money in the account until age 72 – because of the potential for the account’s growth and shorter life expectancy (that is, if the life expectancy tables used to calculate RMDs aren’t updated).

The “Stretch” IRA would be eliminated for non-spouse heirs. This essentially means that heirs who aren’t spouses would no longer be able to stretch out required minimum distributions from inherited tax-qualified accounts like IRAs and defined contribution plans over their lifetimes. Some beneficiaries would be exempt, including the disabled or chronically ill, minors, and individuals less than 10 years younger than the account owner. Those not meeting that criteria would have to withdraw the money over a 10-year timeframe under the SECURE Act. That time frame compresses to within five years under the RESA bill in the Senate if the account value exceeds $400,000.

For the various changes to take effect in the various bills, lawmakers from the House and Senate would have to reconcile any differences before a full House and Senate vote. That means it is still early days, as they say, with regards to the changes. However, we think it is important for you to consider looking into other strategies and options if what is, in essence, the “death” of the Stretch IRA is incorporated into law and the tax code.

Let’s talk about your retirement plan, your tax-deferred qualified accounts, ways to minimize taxation during retirement, and ways you can transfer wealth to your heirs in a tax-advantaged manner. Call Bulwark Capital Management at 253.509.0395


 “Secure Act Calls for Changes to IRAs, RMDs,” June 14, 2019. Rachel L. Sheedy. Kiplinger’s Retirement Report. Retrieved from:
“Washington Threatens to Change Retirement Planning Forever,” June 9, 2019. Dan Caplinger. Motley Fool. Retrieved from:

Women and Social Security: Do you really know your benefits?

By | Social Security | No Comments

Social Security guidelines for retirement benefits were established all the way back in the 1930’s and were founded on a traditional family situation1. With marriage patterns and caregiving needs constantly evolving, the modern woman could be at a disadvantage if strategic retirement planning is not properly implemented. While Social Security is gender-neutral and individuals with identical earnings histories are treated equally in terms of benefits, the reality of the matter is that women face greater economic challenges than men do when it comes to retirement for a number of reasons2.

For example, women tend to live longer than men, but have lower lifetime earnings. Because of this, women have a strong likelihood of reaching retirement with significantly smaller pensions and/or assets than their male counterparts3. Because nearly 55 percent of Social Security beneficiaries today are women, it is important to know the details of your benefits that you may not be aware of.


Caregiving and Strategizing

Losing one paycheck is a concern due to women outliving men. Women also have a higher probability of being single and dependent on only one income. Furthermore, women have a tendency to care for multiple people at a time: parents, spouses, and children, etc., and leave the workforce to care for these loved ones. Taking a break from the workforce to care for loved ones may result in less wealth accumulation and a smaller Social Security benefit. Being single with just one income while possibly taking care of multiple different people at a given time is one of the reasons why it is so important for women, the likely caregivers, to strategize their retirement income. Marriage typically helps Social Security beneficiaries, and knowing that you can take a former spouse’s Social Security benefit could be a major advantage depending on your specific situation.


The Facts You Should Know

If you are married or have ever been married, you have options when it comes to your Social Security benefit…options that no one may have told you about. Did you know that divorced women may be able to receive benefits on an ex-spouse? Even if they have remarried! Married women also have the option of claiming benefits on either their work record or 50% their spouse’s benefit6. Women who have been widowed are also eligible to receive a survivor’s benefit. Here are the cold, hard facts:


Married Women

  • Married women are eligible to claim half of their spouse’s Social Security benefit instead of their own. This option may be beneficial for couples with large earnings differences. To be qualified, you have to be at least 62 years of age (dependent on your birth year) in order to start receiving your benefit.


Divorced Women

  • If divorced, you may be eligible to claim benefits on a former spouse’s record, even if your ex-spouse is remarried. If your marriage lasted 10 or more years, you are currently unmarried, and you are 62 years or older, you are certainly qualified to receive Social Security benefits. Your ex must also be at least 62 years old, and your benefit has no effect on the benefit amount of your spouse.


  • And possibly the most important part of all: your ex-spouse never has to know. The Social Security Administration will not notify your ex if you are receiving his benefit7. And even if your ex-spouse is deceased, you still have the option of receiving his benefit. Which leads to the next point…

Widowed Women

  • If widowed, you are eligible to receive your late spouse’s Social Security payment in the form of a survivor benefit, provided that it is a greater amount than your own benefit. (Why would you take your late spouse’s benefit if it is less than your own?) You must be at least 60 years of age—if widowed, you are not required to wait until age 62. If you are disabled, you can receive this benefit at the age of 50.


  • Know that if you remarry before the age in which you are eligible to receive your late spouse’s benefit, you will be unable to receive their benefit. If you remarry after you start receiving your deceased spouse’s benefit, you can still continue to receive benefit (but if your new spouse is a Social Security recipient and his benefit is larger than your late spouse’s, you may consider applying for your current spouse’s benefit instead). You cannot receive both benefits, you will have to choose one or the other.


Knowledge is power, and the more you know about your Social Security options, the greater you will benefit from your benefit.

We can help, contact Bulwark Capital Management at 253.509.0395  or