Medicare IRMAA Could Be Triggered By Taking Social Security Benefits
You should not hold yourself out as an expert in Medicare if you don't know and are not explaining how drawing Social Security impacts your clients Medicare Part B premiums.
Some of the fundamental questions are "Is it true Social Security is gonna run out in two years?" "Is it true I'll never draw Social Security?" "Is it true it won't be around by the time I get there?"
No, it's not true.
It comes up every year, fourth quarter, and it gets people to click and read newspapers
and read online stuff as clickbait.
It will be here.
Will it change?
Yes, it's going to change. It was formed in 1935. It's changed many times, many iterations.
In the 1970s, you got disability, and it's changed so many times. In 2016, Gordon's Marketing wrote a book on Social Security optimization and three months after the book
was printed, they changed the law to get rid of that. It's always changing, so you can comfort your clients by saying, "it's gonna be here."
Will it change? Yes.
Will you possibly get less? Most likely.
Will they tax more of your income? Most likely.
It's going to change.
With all the changes there is comfort to tell clients, you will get Social Security.
Something to note: Social Security changes their earnings limit annually, which was announced for 2022. If you take Social Security early and before full retirement age, if you exceed $19,560, social security will be reduced. For example, say you have a client that takes Social Security at 63. That's before their full retirement age. Most of the American public still think that full retirement age is 65 but it is between 66 and 67 years old.
Want a trick? You have to Google your birthday, put full retirement age and it will tell you. It might be 66 and 10 months. Whatever it is, at your full retirement age and thereafter,
for the rest of your life you can earn as much as you want. So this only impacts people, this 1960, people that take Social Security early, which is before their full retirement age.
So if they take it at 65, that is before their full retirement age. So if they're making a hundred thousand dollars and they take Social Security, they're gonna be reduced. Anything over 19,000 and a half, for every $2 you go over, they reduce your Social Security by $1. So if you go over $10,000 they reduce your Social Security by five grand. If you go over by a $100,000 you didn't get any Social Security. You screwed up, you should undo that, which there is a way to undo that. So if they're 63, that's kind of a sweet spot for you because the husband's already your client, the wife's 63 and they're grabbing Social Security and they're taking some money out of the 401K, and all this dries up their income.
Why do you care?
Because that's gonna drive up their Medicare part B costs and they're unaware of how these plans dovetail. So just taking Social Security at 62, that's more income for the couple.
So let's say that they're gonna get $15-20,000 extra that could push them into IRMAA at 65 so they need is to make it worth it. They don't want to go $1 over that limit.
What's the limit for 2022?
As an individual it's $91,000. As a couple, it's always approximately double that. It's $182,000. So you don't want the Social Security to drive you to $183,000, because now you're gonna pay all that extra in IRMAA for part B and part D every month for a year. So Social Security and Medicare recalculate annually, but you want to make sure that you made a wise decision to take some out of your 401k, to take Social Security, that you took enough to offset what you are going to give up in IRMAA monthly for at least a year.
I know, this was painful. This is low level information that should know if you legitimately hold yourself out as an expert in Medicare.
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