Dispelling Medicare misconceptions

Between its parts and plans and supplements, many pre-retirees find Medicare hard to navigate without some guidance. Here are the facts about five common Medicare myths:

Myth: Medicare offers free healthcare.

Fact: The Affordable Care Act allows Medicare beneficiaries an annual wellness check at no charge. Beneficiaries also are entitled to free recommended preventive screenings, such as mammograms and colonoscopies, annual wellness visits and personalized prevention plans. For most people, Medicare Part A – which covers hospital stays and services up to certain limits – does not require a premium. But that’s it. You’re still responsible for copays, coinsurance and deductibles.

Medicare Part B, which covers medically necessary and preventive services, has monthly premiums that start at $174.70 for individuals earning less than $103,000 in 2024 up to $594.00 for individuals earning more than $500,000. Part D, which covers prescriptions, has added surcharges for those making more than $103,000.

Many Medicare beneficiaries also purchase a Medigap supplemental insurance plan to help cover out-of-pocket costs.

Myth: Medicare covers everything.

Fact: Not true. Dental, vision and hearing are not covered by Medicare. Prescription drug coverage is only offered through Part D and Medicare Advantage plans. What’s more, you are responsible for the premiums, deductibles and copayments associated with the coverage you choose.

Myth: A Medicare Advantage plan or Part D coverage will fill gaps in my coverage.

Fact: Medicare can be complicated. Medicare Advantage plans – sometimes known as Part C – offer optional coverage through private insurance companies. Many of these plans cover dental, vision, hearing and prescription drug costs not covered by Parts A and B, which the government sometimes calls “Original Medicare.” However, the plans may have limited networks to keep costs down and beneficiaries will have cost-sharing structures that may vary with different plans.

Part D is optional prescription drug coverage that has myriad variables, such as premiums, copays, coverage gaps and coinsurance. You can choose which prescription drug plan best fits your needs.

Myth: Medicare may not cover me.

Fact: One major advantage of original Medicare is that you can’t be rejected for coverage or be charged higher premiums because you’re sick. However, if you’re a high earner, you’ll pay higher premiums for Medicare Part B and Part D. In addition, the Affordable Care Act now prohibits discrimination based on a pre-existing condition. However, private “medigap plans” can have underwriting after the initial guaranteed issue period.

Myth: I will be notified when it’s time to sign up for Medicare.

Fact: No. Unless you are already receiving Social Security benefits, you must apply for Medicare. You will not receive any official notification on when or how to enroll.

If you’re over 65, still working and covered by employer healthcare, you may want to delay enrollment in Part B to avoid paying for coverage you don’t need. Once you stop working, you must enroll within eight months to avoid permanent late penalties. COBRA Or retiree benefits are not considered creditable coverage and you will be penalized if you have COBRA and sign up for Medicare past the age of 65.

For those without employer coverage, it’s a good idea to sign up when you’re first eligible for Part B.

Source: Medicare.gov

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

Social Security increases benefits by 2.5% for 2025

The 2025 Social Security cost-of-living adjustment (COLA) has been announced.

The Social Security Administration has announced a cost-of-living adjustment (COLA) to recipients’ monthly Social Security and Supplemental Security Income benefits. Nearly 68 million Americans will see the 2.5% increase in their payments beginning in January 2025.

The 2.5% increase aims to help beneficiaries keep up with inflation. Although lower than the 3.2% COLA for 2024 and significantly less than the 8.7% increase in 2023 and 5.9% in 2022, it still provides a welcome boost to recipients’ monthly payments. The COLA is calculated based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures the average change in prices over time that consumers pay for a basket of goods and services. The COLA is designed to ensure that the purchasing power of Social Security and SSI benefits is not eroded by inflation.

According to the Social Security Administration, on average, retired workers currently collect $1,927 per month in Social Security payments, or roughly $23,124 per year. The 2.5% COLA will add about $49 per month to those payments or $588 for the year.

Keep in mind all federal benefits must be direct deposited. So if you haven’t already started receiving benefits, you need to establish electronic transfers to your bank or financial institution. Connect with your advisor to better understand how this COLA adjustment may impact your overall financial plan.

Source: Social Security Administration

The consumer price index for urban wage earners and clerical workers is a monthly measure of the average change over time in the prices paid by urban wage earners and clerical workers for a market basket of consumer goods and services.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

Make your final tax-saving moves before Dec. 31

Proactive investors know that the months before year-end can be an ideal time to make strategic adjustments.

While keeping in mind your long-term investment goals, meet with your advisor and coordinate with your tax professional to examine nuances and changes that could impact your typical year-end planning.

Mind your RMDs
Be thoughtful about required minimum distributions (RMDs) to ensure that you comply with the rules – especially as some of those rules have shifted throughout the pandemic.

Investors who reach a certain age are required to take RMDs from their IRAs. You’ll face a hefty 25% tax penalty on amounts not withdrawn from your IRA to meet the RMD, so be sure to speak with your advisor to ensure you’ve met your obligations.

Note: If the RMD is timely corrected within two years, the excise tax rate could drop to 10%. A few reminders for future distribution planning:

• RMDs can be automated with your advisor to help ensure you don’t miss applicable deadlines.
• Your first RMD can be delayed until April 1 of the year after you reach 70 1/2, 72 or 73 (depending on your year of birth). If you delay, however, you must also take your second RMD in the same tax year. This can inflate your income, which may affect your tax bracket. Check with your advisor to determine what is applicable and best for you.
• Subsequent RMDs must be taken no later than December 31 of each calendar year.
• Qualified charitable distributions allow traditional IRA owners who are 70 1/2 and older to gift up to $105,000 from their IRA to a qualified charity.This is a non-taxable distribution from their IRA and can be used to satisfy an RMD.
• Be mindful of how taking a distribution will impact your taxable income or tax bracket. If you are in a low tax bracket, discuss with your financial advisor and tax professional about taking an additional strategic distribution at that lower rate.

To harvest or not to harvest
Evaluate whether you could benefit from tax-loss harvesting – selling a losing investment to offset gains. If your capital losses exceed your capital gains, your excess losses up to $3,000 (single or married filing jointly) can be used to offset ordinary income. Any additional losses can be carried forward to future years. With your advisor, examine the following subtleties when aiming to decrease your tax bill:

• Short-term gains are taxed at a higher marginal rate; aim to reduce those first.
• Don’t disrupt your long-term investment strategy when harvesting losses.
• Be aware of “wash sale” rules that affect new purchases before and after the sale of a security. If you sell a security at a loss but purchase another “substantially identical” security – within 30 days before or after the sale date – the IRS likely will consider that a wash sale and disallow the loss deduction. The IRS will look at all your accounts – 401(k), IRA, taxable, etc. – when determining if a wash sale occurred.

Manage your income and deductions
Those at or near the next tax bracket should pay close attention to anything that might bump them up and plan to reduce taxable income before the end of the year.

• Determine if it makes sense to accelerate deductions or defer income, potentially allowing you to minimize your current tax liability. Some companies may give you an opportunity to defer bonuses and so forth into a future year as well.
• Certain retirement plans also can help you defer taxes. Contributing to a traditional 401(k) allows you to pay income tax only when you withdraw money from the plan in the future, at which point your income and tax rate may be lower or you may have more deductions available to offset the income.*
• Evaluate your income sources – earned income, corporate bonds, municipal bonds, qualified dividends, etc. – to help reduce the overall tax impact.

Evaluate life changes
From welcoming a new family member to moving to a new state, any number of life changes may have impacted your circumstances over the past year. Bring your financial advisor up to speed on major life changes and ask how they could affect your year-end planning.

• Moving can significantly impact tax and estate planning, especially if you’ve relocated from a high income tax state to a low income tax state, from a state with a state income tax to one without (or vice versa), or if you’ve moved to a state with increased asset protection. Note that moving expenses themselves are no longer deductible for most taxpayers.
• Give thought to your family members’ life changes as well as your own – job changes, births, deaths, weddings and divorces, for example, can all necessitate changes – and consider updating your estate documents accordingly.

Next steps
Consider these to-do’s as you prepare to make the most of year-end financial moves, and discuss with your financial advisor and tax professional:

• Manage your income and deductions, paying close atten­tion to your marginal tax bracket.
• Evaluate your investments, keeping in mind whether you could benefit from tax-loss harvesting.
• Make a list of the life changes you and your family have experienced during the year.

*Withdrawals from qualified accounts, such as an IRA, prior to age 59 1/2 may also be subject to a 10% federal penalty tax. RMDs are generally subject to federal income tax and may be subject to state taxes. Consult your tax advisor to assess your situation. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

Light & Fluffy High-Protein Smoked Salmon Egg Casserole Recipe (9 Ingredients)

Prep Time: 15 Min Cook Time: 45 Min Total Time: 1 Hour

Ingredients
1 1/2 tablespoons extra virgin olive oil
3/4 cup red bell pepper, diced
1/2 cup yellow onion, diced
5 ounces fresh baby spinach
12 medium eggs
2 cups cottage cheese
1 cup shredded Parmesan cheese
1 cup shredded mozzarella cheese
8 ounces cold-smoked, wild-caught sockeye salmon, diced

Instructions
To a large skillet or sauté pan with sides over medium heat, add the olive oil, onions and peppers. Sauté until crisp tender, about 3 minutes. Add the spinach and sauté until wilted, about 1 minute. Remove from heat.
Place the eggs and cottage cheese in a blender and whip until smooth, about 30 seconds.
Pour the cottage cheese mixture into a medium mixing bowl. Add the mozzarella and Parmesan cheeses. Stir to combine.
Add the vegetable mixture to the cheese mixture. Season with salt and pepper, to taste, if desired. Stir to combine.
Fold in the smoked salmon until incorporated.
Pour the mixture into a baking pan or casserole dish (see Recipe Notes) that's been sprayed with cooking spray.
Bake in a preheated 350-degree F oven for 30 to 40 minutes, or until the casserole is cooked through and golden. Allow to cool for a few minutes before slicing and serving.

Notes
I used my medium-sized Le Creuset casserole dish, which measures 10x8 inches.
I used a red bell pepper, but you can use any color bell pepper you prefer.
I used cold-smoked, wild-caught sockeye salmon, but you can use your favorite smoked salmon.
Store leftovers in an airtight container in the refrigerator or freezer.

Recipe cooking times, nutritional information and servings are approximate and provided for your convenience. However, 30Seconds is not responsible for the outcome of any recipe, nor may you have the same results because of variations in ingredients, temperatures, altitude, errors, omissions or cooking/baking abilities. Any nutritional information is provided as a courtesy and it is up to the individual to ascertain accuracy. To ensure image quality, we may occasionally use stock photography.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.