Retirement Income Toolbox

October 15, 2016

Those who are currently retired and receiving social security & Medicare probably will want to pay a little attention to the latest Medicare Board of Trustees report that was released just recently.  They indicated that Medicare Premiums will inflate by approximately 22.3% which would have a large impact on the income of retirees that have Medicare Part B plans (Part B plans pay for doctor’s visits and outpatient services) deducted from their Social Security payment.  There is some protection for these individuals.

Social Security benefits are projected by the Social Security Trustees to only increase 0.2% which amounts to only a few dollars extra per month.   For most beneficiaries the premiums cannot increase more than the monthly increase in Social Security.  This is due to a “Hold-Harmless” umbrella that covers those already receiving Social Security & Medicare Part B.  Those who apply for Social Security by Nov 2016 causing their Medicare Part B premiums to be deducted from their monthly checks, would also be protected by this umbrella (Mary Beth Franklin, Investment News Sep 26, 2016).

In most cases this shouldn’t be a reason to rush out and begin drawing Social Security so that your rate increase is capped for 2017.  The additional income that is derived from waiting until age 70 to draw (Health and income needs permitting) Social Security far outweighs the cost savings of the additional Medicare premiums would add up to.  Keep in mind that this “Hold Harmless” umbrella only currently applies to those who have an individual income of up to $85,000 and couples filing jointly up to $170,000 (Mary Beth Franklin, Investment News Sep 26, 2016).

For those not collecting S.S. but currently on Medicare there isn’t any other option other that accepting the increases and knowing they too will eventually have the “Hold Harmless” umbrella protecting their Medicare increases when they begin drawing S.S.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  The economic forecasts may not develop as predicted