The older I get, the more I wish I had been given the opportunity to share in a bigger way with those following in my same footsteps. I spent many, many years trying to learn how to be the best cop possible — the academy, the FTO program, training sessions month after month and year after year. But like most everyone else, I really found it was that “on-the-job training” that proved to be most valuable. The experience of the job was sometimes my best tool in the future.
Having said that, here’s a confession: My most valuable experiences were often my worst experiences. You know, something happened that was remarkably bad or foolish. It made me realize I never, ever wanted to do that again. Thank God (for sure) nobody ever got hurt because of me. It was pure luck.
As chairman of the PORAC Retiree Medical Trust, I really want to share the plan and opportunity with anyone and everyone. We’ve been doing this for a long time. You don’t need to stumble like I did. In order to do that, I am always searching for ways to emphasize how important it is to pay attention now to avoid a pitfall in the future.
So, I’m going to offer some free advice by wrapping up some of my experience, both good and bad, and condensing it down to just a few simple words:
Mind the gap.
If you are from the East Coast, or if you ride the Tube in London, then you know what I mean. It’s that spatial gap between the train doorway and the edge of the station platform. If you aren’t paying attention and you find yourself missing a step, then you could fall into the gap. That is a really bad place to be.
There are two other gaps in life that I would like you to consider before it’s too late.
The first one is the Medicare gap — that period of time between your retirement and Medicare eligibility. Currently, you can draw your Medicare benefits at the age of 65. Are you a classic member retiring at age 50? Then you have a very large gap. You need to consider now how you will pay for health insurance until you turn 65. PEPRA members may have a smaller gap, though that means continuing to work when you are much older, something many won’t be in a position to do.
The second one is the 20% gap. Your Medicare coverage includes Part A, which is hospitalization. Under Medicare, that will be free to you. Part B is for medical. They will deduct the cost from your Social Security benefit to make sure you aren’t late and that you never miss a payment. This will cover just 80% of your medical costs. That leaves you with a gap of 20% for which you are personally responsible. Many of us on Medicare choose to purchase what they sometimes call gap insurance, supplemental insurance or even Medigap. It covers the 20%. The older you are, the more money they want for a policy like that. It’s a bit pricey. You need to have a plan as to how you will pay for that.
Those are two gaps that I would ask you to think about sooner than later. One plan is to put money aside while you are working and use that money later on to pay for your health insurance and medical needs.
That is exactly what the RMT can help you do. A very simple explanation goes like this: Pre-tax money is set aside every month. Those contributions are invested and generate tax-free earnings. Then, once you retire and reach the age of 55, you can draw benefits to pay for those expenses. All of the money paid to you for benefits is totally and completely tax-free.
But the part that some people forget or brush aside is the planning part. You can’t wait until retirement and then try to set it up. You really need to plan today. You need to watch out for that gap. It’s coming your way.
The RMT is stable and financially strong. Now in three West Coast states, we have 65 participating associations and over 8,000 active members. We would enjoy being able to share the plan with you and your association.
