Q & A
Does the health care law offer any new benefits for Medicare beneficiaries?
Answer: Beneficiaries receive more preventive care services – including a yearly “wellness” visit, mammograms, colorectal screening, and more savings on prescription drug coverage. By 2020, the law will close the Medicare gap in prescription drug coverage, known as the “doughnut hole.” Seniors will still…
Does the health law require higher-income Medicare beneficiaries to pay more for their Medicare prescription drug coverage?
Answer: It does. Currently, Medicare beneficiaries who earn more than $85,000 ($170,000 for a couple) pay more for their Medicare Part B premiums, which cover physician and outpatient services. The health law brought that same sliding-scale approach to beneficiaries’ prescription drug coverage in Medicare…
Roth IRAs – Does the pro rata rule apply in a situation where a “backdoor” conversion was effected prior to any deposit from a qualified plan, but both events did occur in the same calendar year? Does the pro rata rule still apply given the funds were never co-mingled in an account at any time?
Answer: Yes. The pro rata rule applies even if a qualified plan is rolled over after the conversion takes place because Dec. 31 is the date the IRA’s are valued for purposes of making the calculation. The pro rata rule applies…
I retired at 58, work part time, and have a net worth of $1.3 million, including investments. When is a good time for me to collect Social Security?
First of all, congratulations on amassing a decent retirement nest egg and for continuing to work part-time as your retirement begins. Doing those two things puts you ahead of many of your peers when it comes to retirement preparation – and it’s smart…
Are you eligible for Medicare?
Answer: One common misconception is that everyone can enroll in Medicare once they reach age 65. While Medicare is health insurance for people 65 or older (along with younger people with certain disabilities and end-stage renal failure), you must meet certain requirements to…
My wife and I have a number of retirement accounts. As we are of age, we are required to withdraw a minimum amount from each of them. Concerning my wife’s accounts, is it sufficient to withdraw an amount equal to the minimum for all her accounts from just one account? My reason for asking is that one account gets a high return and the other has a very low return. Further, would a large withdrawal (based on my required withdrawals) from her account cover the withdrawals that I am required to make, or must I withdraw from my accounts alone?
Answer: You can take a single distribution from one of your wife’s individual retirement accounts to satisfy her total required distribution — provided they are all IRAs and not 401(k) plans — but you can’t double up as a couple, because…
I am 67 and retired this year. I am collecting Social Security spousal benefits on my husband’s work record, having deferred mine as I was working. Now that no income will be coming in, will that reduce the amount used by Social Security to average my income? Should I start the benefits now or should I wait until age 70 to collect? I do not need the income right now.
Answer: If you don’t need the income, you can boost your benefits substantially by waiting until age 70 to collect. For each year past full retirement age that you delay, benefits rise by up to 8 percent, depending on your year…
I want my Social Security retirement to start with January. When should I complete my application?
Answer: Now is a good time. Use the SSA Retirement Planner tools to be sure of your plans and then use the online retirement application. A SSA representative will review the application and might call you. If you want to speak to a SSA representative when…
My husband turned 65 in June. The Social Security Administration told him he doesn’t have to apply for Medicare if he has health insurance. He’s currently covered by my employee health insurance, and I’ll be working several more years. But I’m concerned he may have to pay a penalty if he waits until I retire to apply for Medicare. Was he given incorrect advice?
Answer: Not necessarily. The correct advice depends on the number of people working for the employer whose plan currently covers him. When you’re covered through an employer with 20 or more workers for whom you or your spouse is actively working, that…
If the higher earner spouse waits until 70 to collect Social Security, can the lower earner spouse collect 1/2 of his higher benefit amount?
Answer: A spokesman for the Social Security Administration said a retiree’s spouse will not receive half of the increased benefit. A widow(er)’s benefit, however, will be calculated using delayed retirement credits. Source: marketwatch.com – October 4, 2013