Page 43 - Investment Advisor January/February 2022

He also could jump up a tax bracket, so What Advisors Need to Know
that would need to be considered as well.
About Social Security and Medicare
Another danger: IRMAA.
Once Jerry retires, he’ll start Medicare s founder and president of still see an important increase in their
Parts A and B. Part B comes with a monthly A Mantell Retirement Consulting benefits overall.
premium. In 2022, the standard premium Inc., Marcia Mantell guides advisors But health care is really expensive.
is $170.10 per month. But, if Jerry’s income on business development, market- It’s getting harder for many to man-
is above $182,000 married filing jointly, his ing, education and communication. age — whether already in Medicare or
premium will increase due to income- Mantell also is the author of “What’s in employer-sponsored plans or in the
related monthly adjustment amounts, or The Deal With Retirement Planning ACA Marketplace plans.
IRMAA. He could pay monthly premiums For Women?” and also writes a regular
of $238.10 or $340.20 or more. column for ThinkAdvisor. In an email, What would you suggest advisors do
Technically, Jerry’s 2022 Part B pre- Mantell responded to our questions now or consider doing in the future
mium will be based on his income from on retirement and what advisors need about it?
two years ago. His 2022 income will to know: Assuming health care costs will only
impact his 2024 Part B premium. He can rise going forward, it’s simply critical
file an appeal each year until his lower Investment Advisor: What market for people to plan for hefty increas-
retirement income catches up with Part indicator, industry statistic, regulatory es. Advisors can provide important
B premium determinations. But, based change or advisor trend are you watching information about the rising costs in
on his entire financial picture, his pre- most closely right now and why? their local area. And, they can strongly
mium may or may not get reduced. Marcia Mantell: In general, I watch encourage clients to use Medicare.gov to
both consumer confidence (Conference check their own personal costs.
Also, the six-month retroactive Board) data and various Small Business Clients can (and should) enter their
payment lowers the survivor benefit. Trends (NFIB Research Center). These own prescription drugs and get real
Probably the most consequential result give me a broad view of what’s happen- costs. Plus, clients can shop for Medigap
of taking the lump-sum payment is that ing in the hearts and minds of consum- plans or Medicare Advantage plans and
Jerry’s wife will receive a smaller survi- ers and communities. get ahead of Medicare’s sticker shock
vor benefit if she becomes a widow. Also, each Q3 I await Social Security’s that comes at age 65.
Waiting six months to claim yields a COLA [cost-of-living adjustment]
4% increase for DRCs. His initial benefit announcement and the corresponding Who or what critical source of
of $3,000 per month at FRA increases Medicare Part B premium increase. I information do you track, or follow online,
to $3,120. If he dies 20 years later, his first look at the implication to current to keep up with this or other trends?
benefit would be approximately $4,545 retirees. Then, I can help pre-retirees Medicare.gov’s “Find Plans” tool is
(assuming a straight-line COLA of 2%). prepare better for the high cost of health probably my favorite tool. It is updated
But, if he chooses the lump-sum retroac- care in retirement. The more individuals in October every year, so you can see the
tive payment, his approximate monthly can learn before age 65, the less shocked next year’s costs and make adjustments
benefit is $4,370 in 20 years and his wife they are. to your retirement income plan.
would receive $175 less per month. I track the CMS press releases for
While the numbers aren’t huge, they How has this statistic/indicator been announcements of Medicare premi-
do make a difference when clients are changing recently (in 2021) and how do ums. I signed up for Social Security’s
in their 80s and 90s. Every dollar extra you expect it to change in 2022? enewsletters where they announce
from Social Security helps them off- Frankly, I was surprised how high the annual COLAs.
set their Part B premiums, meet their Part B standard premium increased, Another go-to resource for me on
expenses and stretch their own savings. jumping from $148.50 in 2021 to lots of economic data is Bureau of Labor
The 6-month retroactive lump sum $170.10 for 2022. That’s a 15% hike Statistics. And, for retirement confi-
may sound like a win, but all the dots over 2021 and a further reduction of dence it’s always EBRI’s Retirement
need to be connected first for each indi- $21.60 out of retiree’s Social Security Confidence Survey. They’ve published it
vidual client to see where there are hid- checks. Thankfully, with the strong for some 30 years — as long as I’ve been
den consequences. COLA of 5.9%, most retirees should in the retirement industry!

JANUARY/FEBRUARY 2022 INVESTMENT ADVISOR 41