We have many choices on how to pay our bills today. These include paying by check, electronic transfer, online bill pay and auto drafts. Many of us use a combination of methods to make sure that our bills get paid on time.

Let’s review the methods to pay bills and the pros and cons for each method.

1. Pay by Check
This method is simple and easy to understand. You can control the process and timing of payment. On the other hand, writing checks is time-consuming and the cost of postage is always increasing. Also, money does not come out of your bank account right away, sometimes leading you to believe you have more money in the account than you do.

2. Pay by Electronic Transfer 
This method includes wire transfers, calling the payee with your checking account routing number and account number, and calling the payee with credit card information. This method is quick and dependable. You have control over the timing of the withdrawal and there is no risk of the payment getting lost or delayed in the mail. However, this method is only useful for paying one bill at a time. Also, fees may be charged and there might be online security concerns.

3. Pay by Online Bill Pay 
You instruct payment by accessing your bank account online or the payee’s website. You are in control and set the payment amount and date. This method is best for monthly bills that vary in amount each month, such as a utility bill or a credit card payment. It is straightforward and you save money on postage. On the other hand, this method does require a computer and internet access. There are possible identity theft concerns because your personal account information is online. Also, fees may be charged.

4. Pay by Automatic Drafts
You give control to the business/payee and they remove funds from your bank account or charge your credit card automatically. This method is best for bills that are the same amount each month, such as your mortgage payment or health insurance premium. The pros and cons are the same as online bill pay above. In addition, you lose some aspects of payment control: the business can withdraw money from your bank account even if you don’t have enough money in the account. Also, this method is more difficult to terminate than online bill pay, which you control through your bank or the payee’s website. You often have to revoke authorization in writing. If you choose to pay your bills by this method, you still need to monitor transactions and balances to avoid overdraft fees.

People often ask, “What is the best way to pay my bills?” If you prefer the dependability of paying by check and don’t mind spending the time and paying for postage, pay your bills by check. If you are comfortable with online banking, there are many positives for paying your bills online. However you pay your bills, know the pros and cons of each method and pay your bills on time. 

Beth Carroll is a CPA and a daily money manager. Her company, Cornerstone Money Management, LLC, helps seniors in their homes with billpay, financial organization and cash flow management. You may reach her at beth@cornerstonemoneymgmt.com or 401-323-4895.

​A common misconception is that once you retire and go on Medicare, your health care will be free. Unfortunately, this is not true!

Health care expenses are one of the largest expenses for retirees and tend to increase as we age. According to Fidelity Retiree Health Care Cost Estimate, an average 65-year-old couple retiring in 2018 will need approximately $280,000 to cover health care and medical expenses during retirement. Please note that this depends on when and where you retire, how healthy you are, and how long you live.

​What is the best way to reduce health care expenses in retirement? First, eat healthy and exercise regularly. Second, save during your working years. Third, plan for it! A good way to plan for your health care expenses is to review your current health insurance during open enrollment. Open enrollment is the period from 10/15/2018-12/7/2018. During open enrollment, you can make changes to your Medicare coverage.
 
Here’s a brief overview of Medicare:
 
• Eligibility: You are eligible to sign up for Medicare if you are age 65 or older, or under age 65 with certain disabilities. Sign up at age 65 if you’re not covered by an employer plan; there are penalties for those who sign up late.
• Choices:

1. Original Medicare includes Medicare Part A (hospital insurance) plus Medicare Part B (medical insurance). The government pays 80% while you pay 20% with no limit on out-of-pocket expenses. You can add Medicare Part D (prescription drug coverage). You can also add Medicare Supplemental (Medigap) coverage. A Medicare Supplemental plan covers the gaps left by Original Medicare.
2. Medicare Advantage (Medicare Part C) combines Part A, Part B and usually Part D. Medicare Advantage covers all the benefits in Part A and B plus more. Medicare Advantage limits out-of-pocket expenses with low or no premiums, but you must stay in a network of providers.

• Premiums vary: Most people don’t pay a premium for Part A if you paid Medicare taxes while    working. Part B and Part D premiums are based on income while Part C premiums vary depending on specific plan and income.
• Changes for 2019: The “donut hole” (coverage gap) will close for brand-name dugs in 2019 and for generic drugs in 2020.
 
Yes, Medicare is complicated! There are many resources available to find out more information about Medicare. Medicare & You is an annual handbook published by the U.S. Department of Health and Human Services. Robin G. Smith, a licensed insurance advisor and Medicare expert, recommends going on Medicare’s website (www.medicare.gov/find-a-plan) to view local health care plans, costs and drug coverage.
 
Benefits and premiums change from year to year. After spending time reviewing Medicare’s handbook and website, I strongly recommend that you take a list of your doctors and current medications and meet with a counselor during open enrollment. This can be a representative from the State Health Insurance Assistance Program (SHIP) or an independent insurance advisor. Make an informed decision about your Medicare coverage for 2019.
 
Beth Carroll is a CPA and a daily money manager. Her company, Cornerstone Money Management, LLC, helps seniors in their homes with billpay, financial organization and cash flow management. You may reach her at beth@cornerstonemoneymgmt.com or 401-323-4895.