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Your Social Security Payment May Be Smaller Than You Expect - 24/7 Wall St.com
People tend to base their retirement income on their Social Security estimate. The first item you have to take into consideration is the cost of Medicare Part B. It will be deducted directly from your Social Security benefit. This year, the cost of Medicare Part B is $202.90; if you are married, each spouse pays that amount. It is estimated to reach $209.50 in 2027. The cost has been rising steadily over the years. It’s hard to believe that when it was created in 1966, it was only $3 per month!
However, the standard Medicare Part B can never reduce the amount of your Social Security benefit, as it is protected by a rule known as “The Hold Harmless Rule.” If the increase to your Medicare Part B premium is larger than the annual cost of living adjustment (COLA), it can not reduce your payment, even though your payment will remain the same amount. There are instances when this rule does not protect you. You are subject to the Income-Related Monthly Adjustment Amount (IRMAA) or switch benefits. For example, if you switch from your own retirement benefit to a survivor benefit, you will pay the current amount.
Certain liens can be attached to your Social Security benefit, such as a tax lien with the Internal Revenue Service, which can withhold up to 15% of your payment. Maurie Backman has written an article on this topic. Read the full article here…
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