Category Archives: Social Security/Medicare

If you expect to get Social Security, this is the one thing you need to do in the aftermath of the Equifax data breach

The financial exploitation of seniors is already a problem. And now with the massive data breach by Equifax, it’s just one more thing to concern the elderly. Many people are scrambling trying to put in place credit freezes to prevent identity thieves from opening up credit in their name.

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How to Respond to a Data Breach

You may have read that hackers broke into the Equifax database and stole personal information tied to 143 million people.  The hackers accessed people’s names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers. They also stole credit card numbers for about 209,000 people and dispute documents with personal identifying information for about 182,000 people.  There is no reason to think that data is not for sale to criminals who can use it to open new lines of credit or file phony tax refund requests in peoples’ names.

Continue reading How to Respond to a Data Breach

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No Leverage = Higher Costs

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We hear all the time that medical costs are too high in the U.S., and that Medicare is going to go bankrupt in the future.  The President-Elect recently told us in a press conference that drug companies are “getting away with murder.”  So how high are drug prices, and are those prices contributing at all to the high medical costs in the U.S.?

Continue reading No Leverage = Higher Costs

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Stocks To The Rescue?

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No doubt you know the statistics: the Social Security program’s reserves are due to run out in 2034.  At that point, the only money available to be paid out will be money collected that month from those current workers who are paying into the system.  Current estimates say that this will amount to about 75% of scheduled benefits.

Continue reading Stocks To The Rescue?

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Protected Accounts

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The Social Security Administration has tightened security in order to prevent hackers and identity thieves.  Now, when you log into your Social Security Administration account, you do what you’ve always done: give your user name and password.  Then you receive a security code sent by text message, and type in that code to complete your login procedure.  In the cybersecurity trade, this is known as multifactor authentication.

Continue reading Protected Accounts

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Medicare Fix-It

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Congressional leaders and the Obama Administration have fixed the potentially alarming increase in Medicare Part B premiums under the recently-passed government budget deal.

Medicare Part B covers most health care services outside of hospitals, and thus represents one of the biggest expense items in the government-run health system.  The program is voluntary, but 91% of all Medicare beneficiaries are enrolled in Part B.

The problem that had to be fixed arose because, under Social Security and Medicare rules, the government is required to collect 25% of all expected Part B costs from recipients each year—in the form of premiums.  The total Part B cost was anticipated to reach $171.2 billion 2016.

However, another provision says that in years where there is no increase in Social Security benefits—such as next year—Medicare premiums must be held steady for current Social Security recipients.  As a result, the entire increase would have had to be borne by enrollees who either don’t yet collect Social Security checks; enrollees with incomes above $85,000 (single) or $170,000 (married); or are dual Medicare-Medicaid beneficiaries.  In all, these three categories represent 30% of 2016 Medicare beneficiaries—roughly 7 million Americans.

The new budget deal creates a $12 billion loan from the U.S. Treasury to the Medicare trust fund to reduce the impact on those Medicare participants.  Instead of seeing their monthly premiums go up from $104.90 to $159.30, they will experience a more modest 14% premium increase, to $120 a month next year, plus a monthly surcharge of $3.  This will allow premiums to rise more gradually, and spread the cost over a longer period of time.

About the Author: Bob Veres has been a commentator, author and consultant in the financial services industry for more than 20 years.  Over his 20-year career in the financial services world, Mr. Veres has worked as editor of Financial Planning magazine; as a contributing editor to the Journal of Financial Planning; as a columnist and editor-at-large of Dow Jones Investment Advisor magazine; and as editor of Morningstar’s advisor web site: MorningstarAdvisor.com.

Mr. Veres has been named one of the most influential people in the financial planning profession by Investment Advisor magazine and Financial Planning magazine, was granted the NAPFA Special Achievement Award by the National Association of Personal Financial Advisors, and most recently the Heart of Financial Planning Distinguished Service Award from the Denver-based Financial Planning Association

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Medicare Premium Increases: Not as Bad as Predicted

The Obama administration and congressional leaders have finally reached a tentative budget agreement that will prevent a 52 percent spike in Medicare premiums for millions of Americans. Without the bipartisan budget deal about 17 million Medicare recipients would see their Medicare Part B premiums soar from $104.90 to about $160, USA Today reports.

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https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html

FY2016 Budget in Brief – CMS Medicare

Topics on this page: CMS Medicare Budget Overview | CMS Medicare Programs and Services | The Four Parts of Medicare | 2016 Legislative Proposals | Affordable Care Act Highlights Strengthening Medicare | Highlights of the Protecting Access to Medicare Act | Highlights of the Improving Medicare Post-Acute Care Transformation Act of 2014 | FY 2015 Medicare Legislative Proposals The Centers for Medicare & Medicaid Services ensures availability of effective, up-to-date health care coverage and promotes quality care for beneficiaries.

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Requiem for a Claiming Strategy

images-20On the surface, it seems too good to be true.  You have a married couple, where (let’s say) the husband has earned higher yearly income than his wife.  That means he has contributed more to Social Security over his working life.  The husband files for Social Security benefits at full retirement age (currently age 66) and then immediately files to suspend those benefits.

As a result of this simple maneuver, the wife is now entitled to immediately receive Social Security spousal benefits equal to half of the husband’s full retirement benefits that were just suspended.  She would do this if 50% of the husband’s benefit is higher than she would have received if she had simply claimed her own Social Security payments.

Because he suspended his benefits, the husband can continue working, and wait until age 70 to start receiving Social Security checks in his own name.  Why would he do that?  Because each year of deferral allows him to accumulate more credits—effectively raising his monthly benefits 8% a year, which is considerably higher than the inflation rate.  At that time, the wife would stop claiming the husband’s benefits and start receiving her own Social Security checks.  If she was working at the time, she might have raised the amount she could claim under her own name.  Or she might have been able to wait to claim her own account until she’s 70, raising the amount she collects just as her husband did.

Presto!  More money now, more money later.

This popular Social Security claiming strategy is called “file and suspend,” and by this time next May, it may no longer be an option for retirees.  The Bipartisan Budget Act of 2015 that recently was recently signed into law will close what lawmakers are calling the “file and suspend” loophole six  in the future.  You can expect that eligible seniors will be knocking on the doors of their Social Security offices before that deadline.  Meanwhile, those who have already filed and suspended will be allowed to continue as before.

The original rationale behind the file and suspend strategy was to encourage more seniors to continue working.  The rationale behind ending it is that it was becoming a drain on the Social Security system.  Moreover, Congress was looking for money to offset a huge increase in Medicare Part B premiums for individuals not yet receiving Social Security payments.  The provision is likely to pass the Senate, and could be the opening gambit of a broader discussion about how to “fix” Social Security’s messy finances.

About the Author: Bob Veres has been a commentator, author and consultant in the financial services industry for more than 20 years.  Over his 20-year career in the financial services world, Mr. Veres has worked as editor of Financial Planning magazine; as a contributing editor to the Journal of Financial Planning; as a columnist and editor-at-large of Dow Jones Investment Advisor magazine; and as editor of Morningstar’s advisor web site: MorningstarAdvisor.com.

Mr. Veres has been named one of the most influential people in the financial planning profession by Investment Advisor magazine and Financial Planning magazine, was granted the NAPFA Special Achievement Award by the National Association of Personal Financial Advisors, and most recently the Heart of Financial Planning Distinguished Service Award from the Denver-based Financial Planning Association. 

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Social Security: This strategy to maximize benefits may soon disappear

When it comes to Social Security, most of us hope to get the most we possibly can from our benefits. Methods for making that happen, however, are a source of heated controversy. “File and suspend” is one advanced claiming strategy that can help retirement savers at all income levels, especially women, maximize their benefits.

Colliton: Budget plan ends Social Security ‘File and Suspend’

A popular Social Security planning strategy used by Americans mostly in their 60s to expand their benefits, known as File and Suspend will be coming to an end in six months as a result of last week’s Congressional budget deal. Closely related and also receiving the ax under the Bipartisan Budget Act of 2015 is another rule permitting Restricted Application.

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