Please see below link for an example of how an Annuity can be used to fund health expenses in retirement.

The pros for using an Annuity is;

• Guaranteed income throughout retirement
• They are a pension for those who don’t have a pension

Basic Illustration – Annuity

HVS Financial Launches the Most Comprehensive, Accurate Long-Term Care Calculator To Help Boomers Plan for LTC Costs in Retirement

Danvers, Massachusetts (May 17, 2012) ~ It is an indisputable fact that healthcare expenses rise exponentially in the final two years of life, and the main source of these costs are assisted living facilities and nursing homes.  According to the Department of Health and Human Services, 70% of individuals over 65 will need some level of long-term care (but not everyone will qualify), and the average expenditures can range from $20,000 to $150,000 per year in out-of-pocket expenses.  Another significant problem is that these figures are based on today’s dollars, offering little in the way of long-term projections to help people plan for the future.

In an effort to provide financial institutions and advisors with more realistic calculations for long term care planning, HVS Financial recently added the industry’s most comprehensive and accurate long-term care cost projector to its RetireMark suite of retirement planning software tools.  The LTC cost projector offers an extensive range of calculations and reporting features including:

• a forecast of when a person is most likely to need long term care
• a projection of future costs based on expected length of nursing home or assisted living stay, residency, and health issues.

According to HVS Financial’s President and CEO Ron Mastrogiovanni, “Although Baby Boomers are beginning to educate themselves about the threat of rising healthcare costs in retirement, the proverbial elephant in the room is long term care,” he explained. “These costs could exceed three quarters of a million dollars for some people.  However, very few are actively planning for this event.  Our mission is to offer the most accurate, effective software planning tools that provide advisors with concrete data to help clients prepare for the tremendous impact of future LTC costs.”

While planning for the final two years of life may seem excessive to some, HVS Financial believes that there is growing concern that a lifetime of saving and hard work may go to LTC facilities, rather than children or other family members.  “We believe that with a little foresight and stable investments, nobody has to lose his/her lifetime savings—assets that could be passed down to devoted family members—to a hospital, nursing home, or LTC facility,” he concluded.

About HVS Financial (www.hvsfinancial.com)

HVS Financial is a software firm specializing in healthcare cost planning and health risk assessment tools and solutions. It is one of the only firms in the country that builds solutions that address healthcare and long-term care costs individuals will face during retirement.

Nationwide recently released its Survey on Healthcare Costs, and the most startling statistic—actually the very first statistic cited—was that of the retirees polled who were age 65 and older, 97% stated that they were enrolled in Medicare.

How many human-related activities can be measured at 97%?  Do 97% of Americans finish high school?  Have a bank account?  Get regular haircuts?

NINETY SEVEN PERCENT. 

Despite the fact that more than nine-tenths of Americans will eventually subscribe to Medicare, most financial plans never address what it actually costs. 

Ultimately it ends up being an afterthought—a line item in the expense column during the planning process.  This may be why the vast majority of Americans are under the false assumption that Medicare is actually free (or at least extremely affordable).  It is also why the financial services industry must address this variable as 78 million Boomers march to retirement.

97% of retirees deserve to know what their future holds:

Part A – No premium for those who qualify, but there are some hidden costs like deductibles and co-pays for services (For more on Part A, click here.)

Part B – a $99.90 monthly premium for those earning under the average amount plus other deductibles, co-pays, and excess charges (For more on Part B, click here.)

Part D (Drug Coverage) – Premiums (also based on income), deductibles, co-pays & other charges based on the terms & conditions of the insurance company selling the plan. (For more on Part D, click here.)

MediGap – This form of coverage takes care of the co-pays, deductibles, & excess charges of Parts A and B, but here are fairly high premiums. (For more on MediGap plans, click here)

Other Out of Pocket Expenses – Medicare does NOT cover dental, vision, hearing, podiatry, or routine exams/physicals. Medicare will only cover procedures after a beneficiary has been admitted as an inpatient to a hospital.

Medicare Advantage Plans – are administered by private insurance companies and must follow the rules & regulations of Medicare. They offer the same coverage as original Medicare (with the exception of a MediGap policy), but also provide opportunities to purchase coverage for non-Medicare services like dental, vision, hearing, podiatry, and routine physical exams.

These seemingly small monthly premiums may not seem like much, but factor in all of the additional out-of-pocket expenses—the co-pays, uncovered medications, eye exams—over the long-term, and the cost of simply staying alive can utterly consume the savings of unprepared retirees. 

A healthy 60-year-old couple earning less than $170,000 per year can expect to incur over $685,000, just in Medicare costs, through age 90.  If that same couple happens to make $1 more than the allotted $170,000, they can expect to pay over $825,000 over those same 25 years.

With projections of this magnitude likely to affect almost our entire population, one question begs to be answered:

How can industry professionals, whose sole purpose is to help people plan for retirement, ignore the greatest expense of 97% of their clients?

Myths of Medicare

1)      Myth; Medicare is free 

There is a misconception that Medicare is “free” once a person reaches the magical, worry-free age of 65. While Medicare is subsidized through payroll taxes (the rate is a total of 2.9%of total gross income paid by both employer & employee) there are still plenty of costs connected to the plan.  Unfortunately, not only do subscribers continue to pay as if they are working, they actually can expect to pay even more.

Fact – Medicare has several components; all have which have significant costs attached.  Even Part A, which is labeled as “free,” can have hidden fees, including deductibles, co-pays for service, and possible excess charges.

According to HVS Financial’s unique RetireMark Software—the only tool on the market that allows financial advisors to calculate their client’s health costs on an actuarial basis—an “average” 65-year-old couple retiring at age 65 & living to 90 should expect to incur about $650,000 in Medicare premiums alone.

A 55-year-old couple should expect to incur over $930,000 in costs for their healthcare premiums

2)      Myth; Medicare covers all of healthcare needs in retirement.

Fact – With original Medicare, little things like routine physicals in which diagnostic tests are run are NOT covered.

Fact – Medicare will only cover procedures that occur when the beneficiary is admitted as an inpatient to a hospital.  Because of this rule, services like routine dental, vision, hearing, exams, & podiatry are not covered at all; thus, a 65-year old couple can expect to incur over $310,000 in related costs over a 25-year retirement.

3)      Myth; Everybody pays the same.

Since the passing of the Affordable Care Act & the Modernization of Medicare Act, Parts B & D are now means-tested. 

Fact – For subscribers, this translates into the more you earn, the more you pay. 

The Medicare definition of income is “the total of your adjusted gross income and tax-exempt interest income you may have.  These are the amounts on lines 37 and 8b of IRS from 1040. Some examples of income are wages, salaries, tips, taxable interest, certain dividends, business income, capital gains, and unemployment compensation, as well as annuities, Social Security payments and some pensions.”

Fact – Not only is what you pay affected by income, but also state of residency.  Where you live may increase your out-of-pocket expenses by as much as 30%! (Keep in mind that Medicare Part D & MediGap plans are sold by private insurance companies that can charge what they want; supply and demand are factors.)

To give you an example from HVS RetireMark software, a 65-year-old couple earning less than the Medicare average, residing in California, will incur $529,000 in costs to cover Medicare Parts B, D, and a MediGap policy.

If they move to Florida, the cost will be $551,000.

If they move to Hawaii, the cost will be $415,000.

4)      Myth; There is a choice when it comes to Medicare.

The only choice comes if you purchase a Medicare Advantage Plan. These are constructed and sold by private insurance companies and they must meet the guidelines of Medicare. (They are also subsidized by Medicare, too.)

Fact – with the passing of the Affordable Care Act (ObamaCare) it has been ruled that a person receiving Social Security Benefits MUST also enroll into Medicare when they become eligible.

5)      Myth; Currently there is no way to calculate what these healthcare costs will be.

Fact – HVS Financial has designed a unique yet practical software platform that assists financial professionals in projecting their clients’ health care costs in retirement.

HVS RetireMark software was designed by financial professionals who have lived through these expenses firsthand. The company has partnered with the country’s leading actuarial firm and a board of medical physicians to provide much-needed healthcare-cost information to the financial services industry.      

Markets posted another weekly loss, with the Dow’s year-to-date performance falling below 5%. I had originally suggested taking profits early in March, primarily because the summer is typically weak. However, both domestic and global issues have placed an elevated level of downward pressure on equity markets. Europe, which makes up over 20% of the global economy, is back in the news and banks will be under increased political scrutiny as a result of JP Morgan’s failed hedging strategy, which generated over a $2 billion loss. Thus, be prepared for a volatile week–one that will ultimately lead to buying opportunities.

In my estimation, small and mid-cap securities are prone to suffer from a higher level of downside pressure through the end of August, while blue-chip names offering dividends will likely remain stable. Accordingly, don’t overlook the telecom sector, specifically AT&T (T); healthcare names that include Abbott (ABT) and Gilead Science (GILD); utilities such as American Electric Power (AEP) or a broad based fund similar to the iShares Dow Jones Select Dividend Fund (DVY).

Since timing the market is unrealistic, I have begun a slow and selective process of migrating back into equities while the market is still in a “risk off” state of mind. In addition to adding to blue chips offering dividends, I am preparing to pick up beaten down high flyers such as Chipotle Mexican Grill (CMG) and Apple (AAPL), which appear to be selling at attractive prices today.

Let me stress that it is important not to overreact during market corrections. Instead, carefully adjust your mix of stocks, bonds, and cash equivalents to reflect the risk associated with the news impacting the market’s action. As I emphasized last week, the safest places to hibernate profits (until around Labor Day) are short and intermediate corporate bonds, and cash.

One of the lesser known facts in the world of healthcare in retirement is that Medicare Advantage Plans are subsidized by the government and that the amount is for some staggering.

When the onion is peeled back it can be seen that for every 5 star Advantage Plan sold in the Bronx in New York the private health insurance company will receive $1,114.57 a month as a subsidy from the government

For every 5 star plan sold in Jackson, MS the firm receives $970.25 a month

The most expensive, Miami – Dade at $1,346.58 a month

The total expected to be paid out in 2012 – $1.3 Trillion.

To see the Medicare Advantage Monthly Capitation Rates for 2012 please click here

The subsidies are meant to keep rates low and benefits high but with over 70 million people heading to Medicare in the next 15 years how are we going to keep this up?

Fidelity is stating that average couple will need $240,000 at the point of retirement to cover their Health Costs in retirement.

Are they right or are they wrong or are they just really close?

The answer comes down to how you look at the data (our original post on the subject).

First off, Fidelity has given some details to how they figured the amount. They are stating that they are calculating for Medicare Part B & D premiums and then the rest of the costs will have to come out of pocket of the couple. They are assuming a 6.6% rate of inflation on overall health care costs compounded annually and that the monies earmarked for these costs will earn a compounded rate of 4% throughout retirement.

Finally, they are using life expectancies of 82 for a male & 85 for a female, while claiming that the couple is in average health with no chronic conditions.

Now, what we do know as a fact is that Medicare Part B, for the average person turning 65 in 2012, is $99.90 a month or $1,198.80 per person. We also know by estimates that the average Medicare Part D premium is roughly $400 per year per person.

That leaves us with $1,598.80 per person. If we then compound this number by 6.6% for 18 years for the male and 21 for the female the total the couple will spend in retirement to cover their Health Care expenses is $125,565.

All this couple will need as assets to earmark at retirement, which should be considered as today, will be roughly $57,306- this amount will also have to earn a 4% compounded rate for the next 20 years too.

Now, this seems a little a low, but what we also know is that there will be other costs that can be covered that we can factor in.

We know that there are deductibles and co pays for Medicare Parts A & B (please see Is Medicare Free?), we know that there are expenses if our hospitalization stay is too long or if we need more blood for our procedures. We also know that there are excess charges & costs that are just not covered, like co pays & deductibles for Medicare Part D.

We also know that most of these costs listed above can be covered by a MediGap Policy. These policies  were created specifically to help fill the in “gaps” that original Medicare had created and for some reason the number provided by Fidelity doesn’t seem to include them

MediGap Plans are administered by private insurance companies who have been approved by Medicare to be able to have the opportunity to sell MediGap Policies in each state. The rates, term & conditions of these Policies will fluctuate between each company selling them and each state they are sold in (to see if your state is the cheapest or the most expensive click here).

So with all of this information, how do can we find out what these costs of MediGap Policies and the remaining out of pocket costs will be?

By turning to HealthView Services, we can learn that the National Average cost for a MediGap Plan C Policy is roughly $1,500 per year per person and the National Average out of pocket costs is roughly $700 per person.

These two costs now bring our total to $3,398.80 per person at age 65. If we then compound the numbers by 6.6% for 18 & 21  years we will total $301,901 and all that this couple will need at retirement/today is roughly $197,525, at a 4% compounded interest rate.

But, even that number seems too low when comparing it Fidelity, so let’s look at HealthView Services’ own RetireMark Software to see what is typical for a 65 year average healthy couple who happens to reside in Ohio & earns less than $170,000 annually (Yes, where you live, what health conditions you have & how much you make are as important to figuring out what your costs will be as when you retire & when you expect to die).

The first thing we learn is that the actuarial tables from this decade peg “average healthy persons” on a different life expectancy as someone who has say Cancer. A male should expect to live to age 88 and a female to age 90.

With this new lease on life their costs are calculated to be $492,850.00 throughout retirement and the monies need at the point of retirement/today is $278,399.92 (please note that there has to be a compounded 4% earned each year on these earmarked assets)

If we are to use Fidelity’s life expectancies in RetireMark’s Software the total costs are $305,200.00 and the amount needed at retirement/today is $198,505.77 at a compounded 4% interest rate for this couple who happens to reside.

The side note to this is that RetireMark’s Software is assuming that the user will purchase a MediGap Policy to help offset Health Care Costs while Fidelity assumes that these costs will be paid for by the user.

So if we are to assume that the couple retires today, is in average health, lives in a state that is closest to the National Average, earns less than $170,000, will purchase a MediGap Plan C Policy, will earn a compounded 4% interest rate on monies earmarked for this expense over the course of 20 years and will never ever ever ever have a health condition throughout retirement while having the male pass away at 82 and the female at 85 then the Health Care Number is more like $198,505.77.

If you are not like this, well then your number is going to be different.

How different?

If you have average health, live in Hawaii, have a Fidelity life expectancy and your income is under $170,000 then the total amount spent in retirement will be roughly $244,640.00 and the amount needed at retirement/today is $159,522.35

If you happen to be a couple who has an income defined by Medicare to be over $214,000 per year, happen to live in Florida, both live until age 90 where the male has High Cholesterol and the female has Type II Diabetes your Health Care number will look a lot like $801,162.00 throughout retirement and you will need $442,509.87 at retirement/today.

So is the number really $240,000?

Maybe, if you are a couple who are both aged 65 today, you both have no health conditions and will not have any for the rest of your lives, you will earn less than $170K per definition of Medicare annually as income for the rest of your lives, you will reside in Vermont, and for the male you will have a life expectancy of 82 and for the female you will have a life expectancy of 84.

Then your number will be $251,154

It’s great to know that something that is so personalized like a person’s health can now be broken down to one generic number that everyone who is “average” should use.

Sort of makes financial planning even simpler to do now too.

Weak economic data, concluding with a penurious jobs report, instigated a broad-based market sell-off led by crude oil (dropping over 6% to $94.98 a barrel) and the Russell 2000 (losing 4.07%). This pullback was fairly predictable, as the Dow hit a new four-year high earlier in the week.  However, it is possible that equity markets may not have bottomed out; considering that business news is expected to be light this week, investors will once again focus on jobs and the implications related to the French election of socialist, Francois Hollande.

Market performance for the week ending 5/4/12

On a positive note, the U.S. does not seem to be cascading back into a recession; falling oil prices are giving Americans a collective pay raise; job creation is a lagging economic indicator, and this is an election year, which historically results in a solid performance for stocks.

Over the past two years, equities have essentially underperformed from April through October. Consequently, if you are overweight in “risk on” positions, consider shedding some pounds for spring. Since market timing does not work, do not overreact by completely pulling out of equities. Ironically, the best time to purchase equities is often when the market seems destined for disaster, so for now, it is best to remain cautious, but not panic.

As suggested in last week’s update, I executed the following changes in “Marea’s Growth Portfolio,” reducing equity exposure to from 86% to 70%.

• Sold out of RYF
• Reduced DIA by approximately 3%
• Reduced RFG by approximately 5%
• Reduced SPY by approximately 4%
• Opened a new position by adding 12% to iShares Barclays Aggregate Bond (AGG)

Marea’s Growth Portfolio

Despite the market downturn, my two conservative portfolios performed fairly well last week. Conservative Portfolio #1 dropped 0.97% while Conservative Portfolio #2 suffered a loss of 1.18%.

As stated earlier, I continue to recommend being cautious and prefer to limit cash to 10% or less.  If selling stocks, add the proceeds to short and intermediate bonds that hold a concentration in corporates. Options to analyze include the iShares Barclays 1-3 Year Credit Bond (CSJ, 1.81% dividend yield), the iShares Barclays Intermediate Credit Bond (CIU, 3.6%), and the iShares Barclays Aggregate Bond (AGG, 2.82%). Unless you are investing a minimum of $100,000 in each fixed-income security, focus on open-ended mutual funds and exchange traded funds.

Should you decide to slowly increase exposure to equities, as I began to do on Friday, carefully limit buys to large caps offering dividends. Specific sectors of interest are housing and retail.  My current list of long term buys include iShares Dow Jones Select Dividends (DVY, 3.37%), SPDR Dow Jones REIT (RWR, 2.92%), PowerShares Financial Preferred (PGF, 6.83%), Stanley Black & Decker (SWK, 2.30%), Snap-on Inc (SNA, 2.18%), McDonalds (MCD, 2.92%), Costco (COST, 1.15%), Macy’s—earnings to be released on Wednesday (M, 1.95%), Cinemark Holdings (CNK, 3.60%) Abbott Labs (ABB, 3.27%), and Annaly Capital (NLY, 13.46%).

Please note that May is not regarded as a great month for equities. Buy the recommended positions above to replace high flyers in your portfolio, and do not forget short and intermediate term fixed-income products. Growth was hot in the first quarter, but dividend producers, which performed well in April, will likely continue to gain ground on growth stocks over the next several months. I also suggest that growth-oriented investors should limit equity exposure to approximately 70%. More conservative investors should not hold more than 50-55% in equity at this point in time.

Despite all the doom and gloom rhetoric, I am still bullish on 2012 and expect broad market indexes to achieve new highs by the end of this year.

With each passing day there seems to be more and more talk about Health Care and the impending costs that come with it while in retirement and now with some legislative changes to Medicare we can now expect to see premium costs rise for some retirees

With the passing of the Medicare Modernization Act and the Affordable Care Act new rules were put in place that allowed Medicare the ability to “means test” a beneficiary’s income. Ultimately, Medicare will look at a retiree’s tax returns to see how much income was earned and if it is too high a penalty will be imposed in the form an additional amount of money to paid to Medicare per bracket (see chart below).

For those individuals who are enrolled in Medicare and who make less than $85,000 a year these changes will have no effect (the income limit for couples is $170,000), the basic costs will be $99.90 a month for Medicare Part B and for Part D, the cost will be just the plan that is chosen premium. For those earning just $1 more or higher the costs will have an additional amount tacked on to both B & D:

Now, to add to the confusion in all of this Medicare has redefined what income is per order of Social Security to be “the total of your adjusted gross income and tax-exempt interest income you may have. These are the amounts on lines 37 and 8b of IRS from 1040. Some examples of income are: wages, salaries, tips, taxable interest, certain dividends, business income, capital gains, and unemployment compensation, as well as annuities, Social Security payments and some pensions”.

And once these higher MAGI thresholds are hit there are only a few ways that a beneficiary may be able to go back to the standard premiums and they are;

• You married, divorced, or became widowed;
• You or your spouse stopped working or reduced your work hours;
• You or your spouse lost income-producing property due to a disaster or other event beyond your control;
• You or your spouse experienced a scheduled cessation, termination, or reorganization of an employer’s pension plan; or
• You or your spouse received a settlement from an employer or former employer because of the employer’s closure, bankruptcy, or reorganization.

A Possible scenario from Mark Wilson: (A CFP for BottomLine Secrets):

A hypothetical Bill Jones sells his vacation home in 2007 because he doesn’t want to maintain it any longer. As a result, his MAGI for this year is well over $200,000.

By 2009, Bill is living on his Social Security benefits plus investment income from interest and dividends. His MAGI is around $50,000.

Result: Bill still has to pay the highest Part B premiums in 2009. The fact that his income has dropped sharply won’t help.

So, please keep in mind that once you hit that higher MAGI level you may be there a while no matter what may happen to your income.

This problem may or may not have an impact at all for some but for others it could be costly. If we were to look at HVS Financial’s RetireMark software and input data for a 65 year old male living in Iowa who has no health conditions and earns less than $85,000 a year MAGI, we will find out that;

• His life expectancy – 88 years old
• Expected total costs to cover just Medicare B & D = $112,267

Other scenarios for the same male with everything else being equal except;

His income is $85,001; the new total bill will be = $155,450 for just premiums on Medicare Part B & D

At an income level of $107,001 the new costs will be = $221,232 for just premiums on Medicare Part B & D

At an income level of $160,001 the new costs will be = $287,084.00 for just premiums on Medicare Part B & D

At an income level at or above $214,000 the new costs will be = $353,043 for just premiums on Medicare Part B & D

How do the numbers look for female aged 65 living in Iowa?

Higher because she will live longer – actuarially to age 90

$85,000 or less = $133,117

$85,001 = $184,300
$107,001 = $262,402
$160,001 = $340,348
Above $214,000 = $418,539

The cost of earning just one dollar from $85,000 to $85,001 can be the difference for a Male in New York to be roughly $37,000 over the course of his retirement. If planning is not properly thought out and a sale of a vacation home or realized capital gain on an investment occurs and the amount is significant the damage can be extreme.

“A new report prepared by Republicans on the House Ways and Means Committee suggests that companies would save billions of dollars by ending health insurance coverage for employees under Presidents Barack Obama’s health care reform law.

Based on an analysis of health care data received from 71 of the America’s Fortune 100 companies, the report found that if the companies terminate insurance coverage in favor of paying the $2,000 per employee penalty, they would incur a financial benefit.

According to the report, companies surveyed would save on average $400 million — or a total of $28.6 billion in 2014 — simply by putting their employees on the government exchanges.” – Fox News

Is this the biggest issue with this new Act?

Unfortunately, the answer in the end will most likely be no.

On the surface, this report by the GOP has shed the light on the fact that employers, under the Affordable Care Act, can now drop health benefits “per employee” and only face a fine of $2,000 (which is paid directly to the federal government). This, at the time of writing this bill, may have seemed like steep penalty, but what is coming to light is that employers on average tend to pick up roughly 50% to 75% of the total premiums for an employee’s health coverage which happens to be on average $15,000per year.

So now an employer has a choice;

A)    Either continue health coverage for an employee to the tune of $7,500 to $11,225 annually

Or

B)     Pay a $2,000 fine that goes directly to the federal government for not covering said employee.

The bigger issue may not be the savings for companies or even the penalty they must pay to the government, but the other interpretation to the rules that go along with this – notice the “per employee” line.

Under the Affordable Care Act firms can now choose who they want to cover and who they choose not to cover when it come to health benefits.

In a nut shell, corporations can pick “key” people in the company and cover their health premiums while opting to not pick others.

This is unprecendentaed in the Modern Era.

Corporations have always had the option to not cover health benefits for their employees, but the choice to not make health coverage available  affected every single person employed there. This one provision will now give a corporation the ability to say “we are only going to cover just the Directors of the company and nobody else”.

And the only penalty to do this will be a $2,000 fine for each uncovered employee.

So now, an employee, who by no fault of their own, could one day be told by the firm they have worked at for years that the company has just decided to no longer cover his/her health benefits and that she/he will now have to purchase an individual health plan from a private health insurance company.

Sounds great, doesn’t it?

Oh yeah and the hits keep on coming, because, under this same Act, that same employee who just got hit with the news of no longer being part of a “group plan” must now have , by regulations of this Act, adequate health coverage as soon as possible or face a fine that will paid directly to the federal government.

Ultimately, this new Act has;

• Paved the way for companies to save billions in health costs at the expense of their own employees
• Create a new revenue stream for the federal government (all those $2,000 fines)
• Open the door for health insurance companies to sell more health coverage to more people at individual rates instead of  group rates – thus making more money for them.

To give a broader scope on what to expect when it comes to these health costs – in order for a female to just cover herself today for health insurance she can expect to incur a cost of roughly $5,300 per year.

Same woman who happens to be 63 today but who happens to smoke, have high blood pressure & high cholesterol can expect to pay roughly $11,000 for health insurance.

And in 28 short years when this 35 year old healthy woman will be 63 she can expect to have a bill for over $35,000 just to cover her health costs.

Do you think if this Act is still on the books when this women reaches 63 in 28 years the same company will pick up most of her health costs too or just take the fine?