Have you heard about the coming changes to Medicare in 2020? On this episode of Retirement Starts Today, we’ll say good-bye to the donut-hole and take a look at other relevant changes to the retiree health insurance program. Then in the retirement headline segment, I cover a Forbes article that highlights a proposal on lowering the required minimum distribution amounts that retirees must take from their retirement accounts beginning at age 70.5. Learn how all of these changes could affect you and your retirement plans by listening now.Have you heard about the coming changes to Medicare in 2020? On this episode of #RetirementStartsToday, we’ll say good-bye to the donut-hole and take a look at other relevant changes to the #retiree health insurance program. Click To Tweet
Outline of This Episode
- [1:22] Medicare Part B premiums are changing in 2020
- [8:15] The Part D Donut Hole will be closed
- [9:50] Could RMD’s be going down?
- [13:30] Find out what’s coming next on Retirement Starts Today
How will changes in Medicare Part B premiums affect you?
You’ve been paying into Medicare Part A your whole life, but Medicare Part B is usually deducted from your Social Security check. Each year your Social Security check increases to keep up with the cost of living. Due to the “hold harmless” rule adopted by Congress your Part B premiums will never go up more than your Social Security cost of living increase. In 2020, Medicare Part B premiums are going up, but that doesn’t necessarily mean they will go up for you. Due to the hold-harmless rule, even though the Part B premium is set to increase from $185 to $197 you may not see an actual increase in premiums.In 2020, #Medicare Part B premiums are going up, but that doesn’t necessarily mean they will go up for you. Click To Tweet
What are some other upcoming changes to Medicare in 2020?
You heard in episode 101 that Medicare plans C and F are no longer available to new enrollees. If you haven’t listened to that one, check it out when you’re done listening to this one. These plans will no longer be available since they don’t have any out of pocket costs during the year.
Another upcoming change to Medicare in 2020 is that the income brackets for high earners will increase from $170,000 to $174,000. Learn how you can fill up your tax bracket with Roth conversions and stay within your tax bracket as well.
The Part D donut hole will be fully closed
The Affordable Care Act has gradually been closing the hole in Medicare Part D. Finally, as of 2020, there will no longer be a hole for obtaining brand name or generic drugs. Those enrolled in Medicare Part D will pay 25% of the costs after they reach their deductible until they reach the catastrophic coverage threshold. Prior to ACA Part D enrollees were responsible for 25% until they reached the donut hole after which they were responsible for 100% of those costs.Learn how all of these changes in Medicare could affect you and your #RetirementPlans by listening to this episode of #RetirementStartsToday now. Click To Tweet
Could RMD’s be going down?
Life expectancy tables haven’t been updated since 2002, so they are due for a refresher, which is why there is a proposal to slow down the pace of required minimum distribution (RMD). Currently, there is talk of decreasing the first year’s RMD from 3.65% of your portfolio to 3.44%
As of now, you are still required to take the current rate of RMD out of your retirement accounts. But after the proposal is finalized in 2021 the goal is to slow the pace of forced distributions due to an increase in longevity. Listen in to find out why this won’t affect the majority of the population.
Resources & People Mentioned
- The Danielle Roberts Boomer Benefits episode
- Medicare Resources article
- IRS proposes lowering RMD’s
- Jeff Levine on Twitter @CPAPlanner
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