PLANADVISER - November/December 2022 - 13

increase by 8% for every year past full
retirement
age.
Joel
Schiffman, head
of strategic partnerships at Schroders,
recommends reminding participants to
review their Social Security statements
yearly; these show the different monthly
payout estimates based on the year they
make their initial claim.
3) Full retirement age is still 65. For all
those born between 1943 and 1954, their
full retirement age is 66; the age gradually
increases by a few months for every birth
year, until it tops out at age 67 for people
born in 1960 or later. The full retirement
age not only affects the size of benefits,
but also has an impact on other issues.
For example,
taking benefits before the
full retirement age could affect survivor
benefits for a spouse. Also, if a recipient is
working and younger than full retirement
age, Social Security benefits may be temporarily
reduced if the person earns more
than a certain amount from employment.
But, after full retirement age is reached,
earnings have no effect on benefits.
4) Medicare age has changed with the full
retirement age. " If you're retired, you need
to apply for Medicare at 65, even if you
choose to delay Social Security to age 70, "
says Steffen. Plan participants receiving
early Social Security benefits before age 65
will be enrolled in Medicare automatically.
But everyone else needs to enroll in Medicare
themselves at the SSA website during
the initial enrollment period, which
begins three months before the month
they turn 65 and extends for three months
afterward-even if they are not yet ready
to start taking Social Security benefits.
Unless the beneficiary or spouse is still
working and has health insurance from
a current employer, that person needs to
sign up for Medicare at age 65 or be subject
to a late enrollment penalty. If the health
insurance is from an employer with fewer
than 20 employees, participants may still
need to enroll in Medicare at 65 to avoid
coverage gaps. More information about
the Medicare enrollment rules can be
found online.
5) Medicare and Social Security are unrelated
benefits. If both Social Security and
Medicare are being received, in most cases
Medicare premiums are subtracted automatically
from Social Security benefits.
Most people do not pay premiums for
Medicare Part A, because they or their
spouse paid Medicare taxes from working
for at least 40 calendar quarters-i.e., 10
years. But most will pay $164.90 per month
for Medicare Part B next year. High earners
pay more. Single people with a modified
adjusted gross income as of the last tax
return on file-generally 2021 for 2023
premiums-of more than $97,000, or more
than $194,000 if married filing jointly,
must pay a high-income surcharge. Called
an " income-related monthly adjustment
amount, " this boosts monthly premiums
to $230.80 or to $560.50, respectively, next
year, depending on income. Withdrawals
from tax-deferred retirement savings are
included in the adjusted gross income
calculation-which can be one reason
to consider saving some money in Roth
accounts.
If income has changed since the last tax
return on file due to certain life-changing
events such as retirement, divorce or death
of a spouse, the filer may ask the SSA to
base premiums on more-recent
and reduce or eliminate the surcharge.
income
6) Social Security benefits are not taxed.
The taxation of Social Security benefits is
tricky, but many people pay taxes on at
least part of their benefits. " The good news
is that some portion of your Social Security
benefits will be tax-free, " says Steffen.
If a person's " combined income, " which
includes adjusted gross income, plus
nontaxable interest and half of Social Security
benefits, is from $25,000 to $34,000 for
single filers ($32,000 to $44,000, if married
filing jointly), they may have to pay tax on
up to 50% of Social Security benefits.
If
your total income is above those levels, up
to 85% of your benefits may be taxable.
Knowing these tax rules can be important
for retirees to keep in mind when
deciding which accounts to tap for income
each year, especially if they have some taxfree
money in a Roth that will be excluded
from this calculation. " If they just retired
and are looking to generate income, which
levers can they pull? " says Keri Dogan,
senior vice president of retirement income
solutions for Fidelity Investments. They can
look at various withdrawal options and the
impact on taxes and other benefits, she says.
-Kimberly Lankford
ON THE MOVE
➜ Prudential
Financial promoted
Andy Sullivan to
head of international
businesses and PGIM.
Caroline Feeney will be
promoted to executive
vice president and
head of U.S. businesses.
➜ Oppenheimer &
Co. Inc. recruited
Meridian Wealth
Group, a Nashvillebased
wealth
management practice.
John Wade, who led
Meridian, will serve
as executive director,
investments.
➜ Pure Financial
Advisers appointed
Abbas Hasan as
CEO, responsible
for overseeing all
operational aspects
of the firm.
➜ Anthony Shea
Treadway was hired
to lead Principal
Financial Group's
insurance solutions
distribution team.
➜ Voya Financial,
Inc., has acquired
Benefitfocus, Inc.,
a cloud-based
benefits administration
technology company
that serves employers,
health plans and
brokers.
planadviser.com November-December 2022 | 13
➜
http://www.planadviser.com
PLANADVISER - November/December 2022

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