Medicare premiums and Social Security COLAs: Here's why retirees will pay up in 2018

Medicare premiums and Social Security COLAs: Here's why retirees will pay up in 2018

I didn't know # 2,6,& 9. You? 10 surprising facts about Medicare

From a Crain's Wealth Article July 1st, 2017

http://www.crainswealth.com/gallery/20170622/FREE/622009999/PH/10-surprising-facts-about-medicare&Params=Itemnr=11

10 surprising facts about Medicare

More than 55 million Americans rely on Medicare for their health care coverage. Every day, another 10,000 people turn 65, making them eligible for the government-provided health insurance program. But the rules are complicated, and what you don’t know can hurt you.

   1) Medicare is mandatory

Surprised? It’s true. Once you turn 65 and are collecting Social Security benefits, you must enroll in Medicare Part A, which covers hospital costs. If you don’t want to enroll in Medicare, then you must repay your Social Security benefits. Medicare A is free for most people who have worked at least 10 years to earn the minimum 40 credits required for coverage or who are married to someone who is eligible for Medicare. If you are not yet collecting Social Security, you can delay enrolling in Medicare penalty-free under certain conditions.

  2) No more HSA contributions

Once you enroll in Medicare, you can no longer contribute to a health savings account (HSA), although you can continue to take tax-free distributions from your HSA to pay for medical expenses. For some older workers, it can be a tough choice between signing up for Medicare coverage or continuing to make tax-deductible contributions to an HSA. You can’t do both.

  3)  Procrastinators pay dearly

Your initial enrollment period (IEP) to sign up for Medicare Part B, which covers outpatient services and doctors’ fees, begins three months before your 65th birthday, includes your birthday month and extends three months beyond that. Miss that seven-month window and you will pay a delayed enrollment penalty of 10% per year for each year you were eligible but failed to enroll. Wait until 70 to enroll, for example, and that five-year delay will cost you an extra 50% of the standard Part B premium every month you are enrolled in Medicare. There is also a 1% per month delayed enrollment penalty for Medicare prescription drug plans.

  4) Work longer and skip the penalties

Working longer is a valid reason to skip enrolling in Medicare at 65. If you or your spouse are covered by a group health insurance through a current employer or union, you can delay enrolling in Medicare penalty-free. You have eight months after that insurance coverage ends to sign up for Medicare during a special enrollment period (SEP). Retiree health coverage does not count as creditable coverage but can be used as a supplemental Medigap insurance plan to fill the gaps in Medicare coverage.

  5) Medicare has a lot of gaps

Medicare doesn't cover everything. If you need certain services Medicare doesn't cover, you'll have to pay for them yourself unless you have other insurance that covers them. Even if Medicare covers a service or item, you generally have to pay your deductible, coinsurance and copayments. That’s where Medigap coverage comes in. Some of the items and services that Medicare doesn't cover include services typically used by older people such as long-term care, most dental care, eye exams and eyeglasses, dentures, hearing aids and routine foot care.

    6) Living abroad is no excuse

Medicare coverage is only valid in the United States. That means older Americans living and working overseas face a tough decision: to enroll in Medicare and pay Part B premiums that they can’t use outside the U.S. or wait until they return stateside and pay substantial penalties for delayed enrollment. Coverage through a foreign health system does not count as creditable coverage to avoid Medicare’s late-enrollment penalties.

   7) Dawdlers may have to wait a long time to enroll

In addition to paying a late-enrollment penalty for life, those who miss their initial enrollment period may have to wait a year or more to enroll in Medicare. They can sign up only during the general enrollment period, which runs from January through March each year for Medicare coverage that begins the following July 1. So, an ex-pat who returns to the States in June 2017 would have to wait until January 2018 to enroll in Medicare for coverage to begin on July 1, 2018. In the meantime, he would be responsible for all of his medical expenses.

   8) Income determines Medicare premiums

Although most people who enroll in Medicare Part B in 2017 pay the standard monthly premium of $134 per month, high-income retirees pay more. Individuals with modified adjusted gross incomes (MAGI) of $85,000 or more and married couples with MAGI topping $170,000, pay monthly premiums, including surcharges, ranging from $187.50 to $428.60 per month per person. Premiums are based on the latest available tax return, so 2017 Medicare premiums reflect income reported on 2015 federal income taxes.

  9)  Income brackets change next year

Starting in 2018, Medicare premiums will undergo some major changes. The top three income tiers that determine Medicare premiums will be compressed so that higher premiums are triggered at lower income levels than are in effect today. Those premiums, which will be announced this fall, will be based on 2016 income tax returns.

  10) High-income premiums can be appealed

If your income has declined since the last available tax return due to a life-changing event such as retirement, divorce or death of a spouse, you can appeal the high-income surcharge. Follow the instructions on the letter you receive announcing your income-related monthly adjustment amount. However, if your income spiked for other reasons, such as large investment gains or the sale of a second home, you must pay the higher premium in 2018. But don’t worry; Medicare premiums are reset each year and if your income drops, so will your future premiums.

UPDATED! WHAT EVERY WOMAN SHOULD KNOW ABOUT SOCIAL SECURITY

FOR WOMEN OF ANY AGE & WOMEN YOU KNOW IN YOUR LIFE, MAKE SURE TO READ & PASS THIS INFORMATION ALONG

From today's CRAIN'S WEALTH  06/25/2016  http://www.crainswealth.com/gallery/20170609/FREE/609009999/PH/what-every-woman-should-know-about-social-security&Params=Itemnr=11

ALSO RECOMMEND: SOCIAL SECURITY ADMINISTRATION BOOKLET UPDATE JUNE, 2017

https://www.ssa.gov/pubs/EN-05-10127.pdf

 What every woman should know about Social Security

Women tend to live longer than men, meaning they spend more time in retirement and often do so with less savings, given their lower average lifetime earnings. They are also more likely to live alone in old age due to widowhood or divorce. Consequently, women represent more than half of all Social Security beneficiaries age 62 and older and two-thirds of all beneficiaries over the age of 85.

Here are the top 10 things women need to know about Social Security benefits.

You earned it

If you work for at least 10 years and earn a minimum of 40 work credits, you are entitled to a Social Security retirement benefit as early as age 62 or disability benefits even sooner if you can’t work because of severe illness or injury. Retirement benefits are based on your highest 35 years of earnings. If you work less than that, the zero earnings years in the 35-year-calculation will reduce your retirement benefit.

Marriage Benefit

If you are married, you may be entitled to Social Security retirement benefits, both on your own work record and as a spouse. A spousal benefit is worth between one-third and one-half of the husband’s benefit, depending on your age at time of claim. In most cases, you would be paid the higher of the two benefits, not both.

Disappearing opportunity

If you were born on or before Jan. 1, 1954, you are eligible to claim only spousal benefits on your husband’s earnings record when you turn 66, allowing your own retirement benefits to continue to grow by 8% per year up to age 70. Younger workers will never have this choice. Whenever they file for Social Security, they will be “deemed” to file for all available benefits and would be paid the higher of the two amounts.

Same-sex marriage

Lesbian couples are entitled to the same Social Security benefits as heterosexual couples. Couples must be married at least one year to claim benefits as a spouse. If entitled to benefits on your own earnings record and as a spouse, you would be paid the higher of the two amounts. But if you were born on or before Jan. 1, 1954, you have the option to claim only spousal benefits at 66 and switch to your own larger retirement benefits at 70.

Collect on your ex

If you were married at least 10 years, are divorced and currently single, you may be able to collect Social Security benefits on your ex’s earnings record. And if you have been divorced at least two years and both former spouses are at least 62 years old, you can collect benefits as an “independently entitled spouse” even if your ex has not yet claimed benefits. But to collect only spousal benefits while your own benefits keep growing up until age 70, you must have been born on or before Jan. 1, 1954.

Caregiving spouse

If your husband is collecting either Social Security retirement or disability benefits and you are caring for his minor child under age 16 or a permanently disabled adult child, you may be eligible for a spousal benefit regardless of your age. Once the youngest child turns 16, you will lose your benefits until you qualify for retirement benefits as early as age 62.

Survivors have choices

If you are entitled to a Social Security retirement benefit on your own earnings record and you are a surviving spouse, you can choose whether to collect your retirement or survivor benefit first and switch to the other benefit later if it would result in a larger amount. Reduced survivor benefits are available as early as age 60. Full benefits — worth 100% of what your late husband was collecting or entitled to collect at time of death — are available at your full retirement age (FRA) but they do not grow larger if you wait beyond FRA to collect them. However, retirement benefits increase by 8% per year for every year you postpone collecting them beyond FRA.

Public employees offset

Public employees, including teachers, in about a dozen states are not covered by Social Security. If you have a public pension based on work where you did not pay FICA taxes and your try to collect Social Security benefits as a spouse or survivor, those benefits could be reduced or wiped out by the Government Pension Offset provision. The rule reduces any potential Social Security benefits by two-thirds of the amount of the public pension.

Earnings test

Anyone who collects any type of Social Security benefits — as a worker, spouse or widow — before full retirement age while continuing to work could lose some or all of their benefits to the earnings test. They would forfeit $1 in benefits for every $2 earned over $16,920 in 2017. Any benefits lost to the earnings cap would be reinstated at full retirement age in the form of higher monthly benefits.

New suspension rules

If you are collecting benefits on your husband’s earnings record and he decides to suspend his benefits at full retirement age to earn delayed retirement credits, beware that your spousal benefits would stop, too. Under new rules that took effect last year, anyone can still suspend benefits at full retirement age, but no one can collect benefits on that worker’s record during the suspension.