Saturday, June 08, 2019
Social Security Medicare premium processing error may leave seniors stranded; a financial planner explains Medicare premium means testing and how Roth IRA's can help
Retiree customers of some Medicare advantage programs may find out that they suddenly owe premiums because Medicare had not been properly deducting premiums from their benefit checks and sending them to insurance companies, typical story.
About 250,000 people are affected. Some seniors might not have noticed and not have the money to pay the premiums.
The video above from Heritage Wealth Planning and Jack Scandlen warns about how Medicare premiums are means tested, which I remember hearing and had forgotten about.
He warns that if you are over 70-1/2 and don’t take out the required RMD (required minimum distribution) in time (your bank should to this for you automatically) with tax withholding, you can pay a 50% penalty. The RMD is required except from any company you still work for.
Your RMD divisor goes down as you get older based on actuarial life expectancy. At 10:00 the video explains how the premium goes up with modified adjusted gross income. This is fairly complicated and may require a CPA to manage. The speaker recommends Roth IRA’s.