The Annual Enrollment Period (where individuals can change Medicare Advantage, Stand-Alone Prescription Drug, or Medicare Advantage Prescription Drug plans) ends December 7. Applications for new plans must be dated by December 7 and quickly forwarded to agents or carriers in order to effectuate new plans for 2019. New plans selected during annual enrollment will begin January 1, 2019.
Medicare requires carriers to send out form letters announcing that individuals who have elected new plans will lose their old plan January 1. These letters are somewhat confusing, and members may feel that these letters are encouraging members to switch back to their old plans. This is not the case. Medicare is simply confirming that the member has elected a new plan and that their former plan is terminating. They are NOT requesting individuals to terminate their new enrollments but are merely intending to verify that the member intended to switch plans and are only asking members to take action if there is a mistake and they did not intend to make a change.
TAX SURPRISES YOU MAY FACE IN RETIREMENT
This article by Maurie Backman that appeared in the November 18 issue of the
contains a listing and explanation of 4 tax surprises you may face in retirement:
- Taxes on Social Security benefits
- Taxes on Retirement Plan withdrawals
- Taxes on Pension income; and
- Taxes on Investment gains
Read the entire article
I would add another potential surprise. Individuals age 70 ½ are required to take required minimum distributions
from their IRA, SEP IRA, SIMPLE IRA, or retirement plan account when they reach age 70½. Roth IRAs do not require withdrawals until after the death of the owner.
Not only will you need to pay taxes on the amount of the distribution above your tax basis, receipt of an RMD can increase your reportable income enough so that you may be subject to what is called an Income Related Monthly Adjustment Amount (IRMAA), which increases the amount you will have to pay for your Medicare Part B AND prescription drug coverage. See this
published by the IRS.