Can Your Social Security Payment Go Down? Yes, it can. - AMAC & Forbes

Steve Parrish is Co-Director of the Retirement Income Center at The American College of Financial Services, with 40 years in retirement planning issues. He describes a very real case when one’s Social Security income can decrease year over year, even after a cost of living adjustment (COLA). The issue is unrelated to going back to work, which can have that effect. Also, the decrease is not due to regular Medicare premium increases, as the ‘hold harmless’ provision prevents actual decreases to benefits. The culprit is a spouse earning significantly more. That additional income can throw joint income into a higher bracket for what’s called the Income-Related Monthly Adjustment Amount (or “IRMAA”). As Parrish explains, while IRMAA is thought of as a premium, it is really a tax assessed on retirees as income goes up. It is particularly unforgiving because of its lack of grading between brackets. Thus, the increase in Medicare premiums in general, plus the “adjustment” associated with one’s income can obliterate any gain realized from a COLA. A 5.9 percent Social Security benefit increase is a pyrrhic victory when your Medicare health insurance premiums more than wipe it out.  Read the full piece here.

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