Retirement Tip #2: The $280,000 Retirement Bill
We know talking with a parent about money is hard. That’s why at Kindur we’re here to help you start the conversation that will help Mom and Dad #retirefearlessly.
As part of our ongoing series, we are tackling our next topic, Medicare. If your parents are currently Medicare eligible or will be eligible beginning next year, now is the time to make sure they understand upcoming changes to the program.
What you may already know
Medicare is the government healthcare program for retirees. If your parents have paid into the system, they are eligible for benefits beginning at age 65.
There are a bunch of different parts of Medicare. The first part, Medicare Part A, has no charge. It covers hospital and facility charges. They also will be able to sign up for Part B which will cover things like doctors and testing. Last, they can enroll in Part D coverage which is for prescriptions. There are also supplemental policies they can get through private insurance companies known as Medigap policies which help to cover deductibles and coinsurance amounts.
What you may not know
There are some significant changes happening to the Medicare program next year, most notably increases for premiums and deductibles. The premiums for Part B alone are increasing by around 7%.
Have you heard of IRMAA?
IRMAA is the acronym for the ‘income-related monthly adjustment amount’ and this year, millions of Americans will pay this surcharge for their Medicare coverage based on their income. Many of those will be paying more than they should. This is because the IRS calculates using earnings that are about 2 years old.
If your parents have recently retired, or their income has decreased in the past 2 years, they may be able to avoid the IRMAA surcharge by updating their income with the Social Security Administration. This ‘high’ income-related surcharge may be costing Mom and Dad $1600+.
How we can help
With the average cost of healthcare in retirement being $280,000 for a couple, it definitely pays to stay ‘Medicare Aware.’ SmartDraw has Mom and Dad covered. We help them stay ahead of Medicare updates and every year we do an IRMAA check-up for them.
Kindur is a New York based financial technology company dedicated to helping Baby Boomers feel prepared moving into retirement. We provide smart, automated advice to personalize your retirement strategy so you can manage your savings with confidence. Learn more at kindur.com/smartdraw
Get More News & Insights From Kindur