Great news, @NJres. Based on feedback from friends, the app for Medicare is not so easy… plan to start working on that a few months earlier than age 65.
@colorado_mom if you are already collecting SS when you become Medicare eligible…there is no application to complete at all. Your Medicare card just appears in the mail. Easy peasy.
Now…your supplement plans or if you decide to do Medicare advantage…that does take time.
@thumper1 I was trying to remember how hard it was to apply for Medicare. I couldn’t remember what I did. I see I didn’t apply. I didn’t have to.
Oh super–I have wanted to share a warning about medicare as your years go on. This is about once it is established.
H and I needed to do a financial draw for D’s wedding and our drainage system and garage repairs. Because we took so much in one year (never had before) it bumped us up 3 levels and medicare told us we would be paying $600 more a month due to our years income! H petitioned and sent both an explanation and taxes from the past years. Fortunately, they were fabulous and honored our request. So the message is to check and make sure that your yearly income draws do not end up costing you more in medicare-- or at least know to expect it. AND know that you can petition to change it. I still do not know how we would have thought about this ahead of time as we were never told and never even thought about it…
@oregon101 – Here is a useful article on the calculation of the IRMAA surcharge.
good link CT1417, but we were just not aware or thinking. I am not sure that I even knew to think about it and H was preoccupied with the wedding and drainage. So just a friendly heads up to new medicare folks. Our expenses were in 2017.
Reading through this, it looks like you don’t pay for the basic Medicare(I think part A) if you are collecting social security. Seems like that would be something to consider. Why wait until after age 65 to collect Social Security, if you have to pay hundreds a month in Medicare costs? Unless I misunderstand this.
If you are over 65 and still working, your employer may let you keep your employer-provided coverage.
That would work, but if you’re not, seems like it would be worth taking SS at 65 so you don’t have to pay for Medicare.
My H was and is NOT eligible for SS but still got free Medicare A when he applied after he was 65 because he worked and contributed to Medicare for enough quarters.
Getting free A has nothing to do with when or if you ever collect SS. Collecting SS at 62, 65, 66 or 70 won’t affect whether you are entitled to “free” A.
H is ineligible for SS because he didn’t contribute for enough quarters and even if he was eligible, he wouldn’t get it due to windfall elimination or govt offset, as he gets a fed govt pension.
Thanks for that clarification, @HImom. I definitely misunderstood the article that I read.
@oregon101 What did you tell to Medicare when you petitioned? We converted to RothIRA and hit with about $1,000/month premium. As you, I didn’t think to consider IRMAA when we converted, just tax consequences. I know it will come down next year. It still hurts since we were covered by the employer and didn’t pay anything before signing up for medicare.
I am extremely appreciative of the IRMAA information. Not for us but for my mil. She isn’t at that level of modified AGI (yet), but my now-deceased father-in-law opted to invest the majority of their assets in annuities. She has not taken any money out of those as she has not needed to. Her teacher reitrement, SS, and income from other investments allow her to live quite comfortably. And, she may not ever need to take anything out of those annuities, but having an awareness and (hopefully) being able to plan effectively with this IRMAA implication in mind is certainly helpful. With our being mid-50s Medicare “planning” just hasn’t been on our radar. Not sure how much her RMDs on IRAs go up each year, however. At any rate, I forwarded the linked article to dh who handles her taxes and manages her investments. Thanks, @CT1417
I know that the pros and cons of annuities have been discussed on this thread before, but I really don’t think fil understood what he was doing when he invested in them. In his ledger book where he kept a handwritten list of all their investments he had written - “no income taxes.” I’m not really sure if he understood that the income tax was simply deferred rather than non-existent. He thought he was a lot more savvy with money than he was.
To clarify, Medicare Part A (hospital benes) is free (whether or not you’re drawing SS) providing you qualify for it - which most people do. If you’re getting SS the Part B premium (Dr visits etc) is usually $135.50/month and will be (I think) automatically deducated from SS before you get your check. Otherwise, you pay the Part B premium monthly or quarterly. In addition, most of us get a supplement to cover some of what medicare doesn’t.
Re IRMAA - we also had success getting this removed by making clear that current income was greatly different from that of 2 years ago (DH lost his job). For those of medicare age condsidering Roth conversions from traditional IRA’s etc - definitely worth considering the IRMAA cutoffs when determining the annual conversion amounts. Also, IRMAA cuts offs are markedly different for single vs MFJ , so if one spouse dies the survivor may be hit with greatly increased medicare premiums if family income doesn’t change that much. This can be a reason for doing Roth conversions to decrease RMD’s from traditional retirement accounts.
So what people do if they don’t qualify for medicare?
I hope this isn’t a political statement. I used to think Medicare for all was a great idea. After being hit with $1000/mo, I have to say I am not so sure. If one has an employer sponsored health care with minimal out of pocket cost and gets hit with IRMAA, they won’t be happy. I certainly am not.
Somewhat related…
Cannot recall if this was discussed here previously and too lazy to try to search the old threads, but for those helping parents with tax planning, here is a link that explains the use of Qualified Charitable Distributions to reduce taxable income. I never got around to using this with my mother for her regular contributions to her church, but I should have. Amounts disbursed count toward the RMD but will not be considered taxable income, lowering both taxes owed and potentially helping a senior who is on the border of an IRAA threshold. Some people will lose the itemization of charitable contributions under the new tax law, so this restores that deduction.
I am not a tax person, so I should probably stop quoting tax advice. Please correct me if I am wrong!
https://www.fidelity.com/building-savings/learn-about-iras/required-minimum-distributions/qcds
I have an IRMAA surcharge for both my Medicare and RX coverage. Believe me…it’s not my retirement income that is driving this…but DH is still working at a high paying job. We did crunch the numbers to decide which was a better deal…his employer plan or my Medicare with IRMAA. For us, Medicare was a better deal by a lot.
Once DH stops working, our income will drop to below IRMAA required increased amounts. Good.
DH is 65 but elected to stay with his employer sponsored plan and just do part A for now. He also gets an additional dental plan (which covers much more than his plan) through my former employer at no charge.
Any experience with someone going on Medicaid at age 26?
Hoggirl, be sure to check the terms of those annuities to see what happens if your MIL doesn’t draw from them during her lifetime. You don’t want it to revert to the company or have termination fees (if you inherit and want to dump the annuity) eat up all the growth in the account. It make more financial sense to take the payments now and invest them on something that’s more liquid/low fee.
@busyparent — you may wish to start a separate Medicaid thread as it is not generally a topic closely related to retirement (at least most folks hope it isn’t).