This marks the last Part and as they say … last but not least … Mr. Clark discusses the three options for Medicare Supplemental/Gap Policy. Let it be noted, you most certainly need these, but the good news is this is finally pretty straight forward.
Direct Audio Here on our site for your viewing/listening pleasures as well as links to every full post:
Once again, neatly there is a gold nugget of information in the audio, and a trick on where to find an easy phone number to call to get a referral for help – listen up and enjoy –
Medicare Supplement Explained Three Options
Employer Offered Supplemental Private Insurance – this less often- likely best option if available – best coverage
Traditional Medicare – no network must buy a Medigap Policy A through F – Full comprehensive coverage- similar to full health coverage, but at the Medicare Level
Medicare Advantage – Like Medicare HMO – Network of People that must go through
26 Medicare Advantage plans in DFW area-
Part D may or may not be available for Medicare Advantage
Do not try to do this all by yourself- see next
Local Non-Profit Agency – Dallas County would likely be the Dallas County Agency on Aging, Fort Worth would be the Tarrant County Agency on Aging
Dial – 211 – Phone Number for Social Service Referrals – NO kidding – Texas a state that this number works completely, may not be available in all states
The most complex part of Medicare decisions comes from folks that work past age 65. The most important point of this entire second half of Mr. Clark’s presentation is that to get the most exact details for your situation you should check with your health insurance carrier. Frequently employers’ HR departments are outsourced and a recurring theme is the HR department is not in sync with the health insurance carrier.
Bottom line your health insurance carrier is your go to point of contact if you continue to work past age 65 as you will most certainly need to find out how they want you to handle your Medicare decisions.
Direct Audio Here on our site for your viewing/listening pleasures as well as links to every full post:
Much like our Social Security Benefits discussions, there are certain parts of Medicare Benefits that have more decisions and techniques to choose – Medicare Part B is by far the most detailed, confusing and has the most options to choose – The audio is terrific and gives more details than the bullets below – take a listen!
Medicare Part B Creation, Cost, IRMA, Benefits Options
Medicare Part B:
Doctor Bills coverage and outpatient coverage
Part B has a cost of $135/Month –
You can turn Part B down, but not a good decision unless you have current health insurance coverage “Not taking could be the worst financial decision you make” According to Clark
The $135/Month is about 1/4th of the actual premium – Government Supplements the 3/4 – see next
Income over $85k Individual or $175k Couple, you will pay more as the Government supplement goes away – IRMA – Income Related Monthly Adjusted Amount – click link for recent detailed analysis and solutions
IRMA – Everything but Roth counts towards income, including tax free, interest and anything
Started in 2005 to pay Medicare Part D, Drugs and prescription-
Can refute IRMA as administration has three year old data
The most complex part of Medicare decisions comes from folks that work past age 65. The most important point of this entire second half of Mr. Clark’s presentation is that to get the most exact details for your situation you should check with your health insurance carrier. Frequently employers’ HR departments are outsourced and a recurring theme is the HR department is not in sync with the health insurance carrier.
Bottom line your health insurance carrier is your go to point of contact if you continue to work past age 65 as you will most certainly need to find out how they want you to handle your Medicare decisions.
Direct Audio Here on our site for your viewing/listening pleasures as well as links to every full post:
Medicare Part A Explained
During the meeting, there was a lot of jumping between Medicare Part A and B, with a ton of information on Part B coming in the next Part. Early in the audio, the most important item to note is re-iteration as above, for those many of us working beyond age 65, check with your Health Insurance Provider for the best source of accurate actions needed on your part – ok, here are the bullets from the Audio for Part A Medicare:
Medicare Part A only for Hospital care
Medicare Part A is funded via the 1.45% FICA Tax from your payroll during your working lifetime, as such no cost upon retirement/enrollment
Medicare Part A (B) starts at age 65 (Not age adjusted as Social Security)
Consult your Health Provider, not HR for best post 65 age Medicare Part A decisions and elections
Once on Medicare, cannot fund your HSA – a reason you may want to defer Part A if you have full other coverage options
If still employed and you do not take Medicare, you can still fund your HSA –
By deferring Medicare A you will have a small penalty on Medicare Part D – Drugs
Social Security . Gov website to start Medicare and can choose Part A and/or Part B
Careful when you file for Medicare Part A, normal look back of six months which may void your HSA – must sync this
If you are over 65 and drawing full retirement age, you automatically have Medicare Part A
This audio is a bit longer, but full of great examples for the bullets above …coming up the more complicated decisions of Medicare Part B –
What follows will be a multiple part series as we will attempt to explain the various parts of Medicare. In this first post, a high-level explanation of just Part A and B.
The most complex part of Medicare decisions comes from folks that work past age 65. The most important point of this entire second half of Mr. Clark’s presentation is that to get the most exact details for your situation you should check with your health insurance carrier. Frequently employers’ HR departments are outsourced and a recurring theme is the HR department is not in sync with the health insurance carrier.
Bottom line your health insurance carrier is your go to point of contact if you continue to work past age 65 as you will most certainly need to find out how they want you to handle your Medicare decisions.
Direct Audio Here on our site for your viewing/listening pleasures as well as links to every full post:
Medicare Statistics, Background and Part A and B Explained
OK here we go an introduction to stats and statistics and a high-level view of Medicare Part A and B:
Medicare is far more important than Social Security benefits as the government offset of Medical Costs are likely much greater than Social Security Benefits
Bet you didn’t know Medicare was started in 1965!
Medicare’s purpose is to provide substantial benefits at very reasonable costs for retired folks at age 65
Unlike Social Security Age 65 remains the age Medicare Benefits begin for retired people
Social Security Disability receivers are automatically enrolled into Medicare after two years of disability benefits
Part A is Hospital Insurance Benefits – Prepaid
1.45% of FICA taxes used during work to prepay Part A
Part B Covers Doctor bills and out patient treatment
Part B has a cost- monthly starting premium of $135 month – there are means test that increase this cost
This cost is usually withheld from Social Security Benefit
If not taking Social Security, you will be billed directly
RMD – AKA Required Minimum Distributions – the Governments’ mandate of distribution from our IRA (Pre-Tax) funds in order to finally occur taxes is upon us…..
RMD Season
In the coming weeks we will begin transferring mandated funds from our IRA/Qualified/Pre-Tax accounts to their directed destinations….
As a reminder this is so the US Government gets to take the taxes due …
IMPORTANT (Neat) Facts –
RMD $$ mandated amounts are determined by the value of applicable accounts on the last day of the prior year
Current year age is a necessary factor included in calculating the RMD – see below next, first time exception – each year of seasoning (getting older) we are forced to take more out of the applicable accounts – hey the IRS has never taxed us on these in many cases – it’s their time!
After tax contributions to a qualified account MUST be accounted for in order to avoid taxes – here are greater details and our taxpayer obligations on this – don’t overpay – the IRS is not tracking this and will not come to the rescue and lower your taxes
All of an individual’s accounts must be included/totaled/value (certain exceptions are made to those continuing to work) to ascertain the needed distribution
Any one account can be used to satisfy the needed distribution (you do not have to take a little from each account, making it easier from an organization standpoint) BUT you must take at least the minimum distribution
Failure to take the mandated distribution amount COULD result in a 100% tax – Break in – our experience has been the IRS is nice about this, but let’s not test them
The mandatory commencement date of RMD’s is the year AFTER you turn 70.5 years young, under current tax law…
If you accept this first year deferral, you will incur two RMD’s in the year you commence your first RMD…
Depending on the situation, it may be advisable to distribute your first year RMD a year early so as not to clump your taxable distribution….
Is your DOB between 7-1-48 to 6-30-49?
Then you turn 70.5 in 2019 and you CAN defer your RMD until 2020, however you will have two RMD’s next year — be careful, large distributions could toss you into an extra tax bracket.
Reach out if you have ANY questions, we have plenty of time, BUT the clock is ticking…
This is the final review of Social Security Benefits and actually a very unique one as this portion speaks to a VERY small group of people who are luckily grandfathered in under old laws and due to that fact have one additional option/decision/possible technique.
Restricted Application Technique Benefit Option for Married Couples Meeting Grandfathered Age Criteria
While for a small and quickly shrinking group of folks due to the law change, the Grandfathering of a loophole technique/option makes this worth review :
Most applicable when two wage earners
Age 62 or older by end of 2015
Must not have filed Social Security yet
Restricted application for spouses only
This age group has the option to file on their spouse – as a reminder all others must always file on their own benefit first
Must be full retirement age before able to use technique
One member of couple is drawing social security already
Can file on spouses benefit and delay his/her own benefit to let benefit grow
As we near the end of the Social Security Retirement Benefits portion (Medicare up next), the final Three Parts will be directly related to spousal benefits. Spousal benefits are EXACTLY the same no matter gender, so insert your preference for the easiest understanding.
Parts (8-10) will deal with the status of the spouse and how it effects retirement benefits for the other spouse:
Living
Deceased
Divorced
As just a heads up, each section will become more detailed and complicated – so let’s get started on the various spouse benefits depending on the other’s status!
In this clip, it becomes very apparent that Divorce and Deceased Ex Spouses carry burdens by us the consumer to check with Social Security for possible increased benefits – also of note there IS a disadvantage to remarrying a lower income spouse :
Divorced Spouse must have been married 10 years, unmarried and meets all the benefits of current/regular Spouse to draw benefits – and is still unmarried.
Ex Spouses DO NOT effect in any way other benefits for others – Ex Spouse or new spouse’s benefits – Technically someone could be married and divorced as many times as longevity would allow, and as long as each time they were married 10 years all would receive benefits and NOT effect any others benefits!
If get remarried, cannot draw benefits on a living Ex husbands benefits.
Example: Married to high income earner and get divorced, remarry to a low income earner, likely will reduce benefits spousal benefits if yours are not greater on your own.
Near end of audio – important statement – If you are divorced, especially if your former spouse has remarried and the current spouse is drawing a spousal benefit, Social Security likely has no record of your marriage to that spouse – see next point
Should your EX spouse pass away, you may be entitled to and increase in benefits if you meet the requirements of current wife of widow.
Because of the first two points, you may consider calling Social Security to confirm your Ex is still living, if this is not the case, you may be entitled to an increase in benefits- again, something Social Security would have no idea due to remarriage of your Ex
Dealing with Divorced Spousal benefits carriers obligations in order to maximize Social Security Benefits …
Be sure to listen to the audio below from the event, it is very informative!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, please consult your financial advisor prior to investing!
Background
The is the vocal portion of J.K. Financial, Inc. a Dallas Texas Based Fee Only Total Wealth Financial Planning Firm. Founded by John Kvale, a Dallas Texas Fee only Financial Planner and Total Wealth Manager.
