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Published On
February 28, 2023

If you have some savings but can’t contribute any more, will you ever be able to retire? Joe and Big Al have three simple strategies to help you get there. Plus, how long does it take to get off of Medicare’s monthly income adjustment amount (IRMAA) after your income decreases at retirement, and how do you take unknown future IRMAA income limits into account when setting up your financial plan? Can you “re-do” Social Security and stop taking benefits after claiming Social Security early? Do spousal benefits change after one spouse files for Social Security? And finally, the fellas address a few corrections they’ve received recently regarding Medicare and safe harbor 401(k) plans. What exactly is “top-heavy” anyway?

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Show Notes

  • (01:02) Will I Ever Be Able to Retire? I Have Some Savings But Can’t Contribute More (Patty, NY)
  • (06:38) Retired, Income Dropped, Enrolled in Medicare. How Long to Get Off IRMAA? (Randy, Hb, Ca)
  • (08:05) How to Plan for Unknown Future Medicare IRMAA Income Limits?
  • (10:53) “Re-Doing” Social Security: Can You Stop Taking Benefits After Claiming Early? (Lauris, Volcano, Hawaii)
  • (12:39) Will Spousal Social Security Benefit Amounts Change When One Spouse Files? (Philip, Los Angeles)
  • (15:09) SECURE 2.0: When Must You Pay Taxes on Company Match Retirement Contributions? (Jim, Dallas, TX)
  • (19:47) CORRECTION: ACP Test for Safe Harbor 401(k) Plans, After-Tax Contributions (Debra, St Louis)
  • (25:08) CORRECTION – Medicare Test: Creditable Drug Coverage (Steve, Las Vegas)
  • (28:56) DUKE’s Medicare Enrollment Experience (DUKE (John Wayne), Knoxville, TN)
  • (32:54) The Derails

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Transcription

If you’ve got some retirement savings but can’t contribute any more, will you ever be able to retire? Joe and Big Al have three simple strategies to help you get there, today on Your Money, Your Wealth podcast #418. Plus, how long does it take to get off of Medicare’s monthly income-related adjustment amount, or IRMAA, after your income decreases at retirement, and how do you take unknown future IRMAA income limits into account when setting up your financial plan? Can you “re-do” Social Security and stop taking benefits after claiming Social Security early? Do spousal benefits change after one spouse files for Social Security? And finally, the fellas address a few corrections they’ve received recently regarding Medicare and safe harbor 401(k) plans. What exactly is “top-heavy” anyway? Visit YourMoneyYourWealth.com and click Ask Joe & Big Al On Air to send in your money questions – or corrections! I’m producer Andi Last, and here are the hosts of Your Money, Your Wealth®, Joe Anderson, CFP® and Big Al Clopine, CPA.

Will I Ever Be Able to Retire? I Have Some Savings But Can’t Contribute More (Patty, NY)

Joe: Now I got Patty from New York. “Hey, love the show. I’m 57, single mom and earn $120,000 a year. Have $180,000 in IRA, $60,000 in a 403(b), which my employer contributes 9% of my salary annually. I own my home, which is worth $1,000,000. I have two kids, ages 14 and 18. The 18-year-old is a freshman in college. I have $250,000 in a 529 plan, which should cover their college tuition. My expenses are $8000 a month, which is what I take home. I’m not able to save much money. All the money in my IRAs is from past employee pension plans. Through work, I also have the option to contribute to a Roth 403(b), but haven’t been able to because of my living expenses. Will I ever be able to retire? What do I need to do to get there? Thank you. Forgot the important details.” What are they?

Al: Okay, here we go. Page two.

Joe: “I still owe $180,000 on my mortgage, interest rate is 3.6%. My drink of choice is Cabernet. I drive an old Honda Pilot.” So she needs $8000 a month.

Al: Yeah. So that’s about what, $96,000 a year? call it $100,000?

Joe: Yes, sir. We don’t know- how old is she? 57?

Al: 57. Yeah.

Joe: Let’s say 67. She’s got a 403(b), so I don’t know if she’s got a pension. She’s got-

Al: She might, but she didn’t say.

Joe: She’s got $200,000- plus let’s go $250,000. We’re gonna go here. We’re gonna go 10 years. We’re gonna go 9% of that is $10,000-

Al: Joe’s got his calculator out.

Andi: Yep.

Joe: Okay. We’re gonna have 630 there, so she’s gonna need, I don’t know- if you got a 403(b), usually you have a pension. So I’m not sure if Patty’s got a pension or what her Social Security’s gonna look like? But at $8000, $100,000, that’s including a mortgage payment of a few- So let me go- She’s gonna be close. She’s gotta tone down the living expenses just a smidge, maybe when the younger child gets out-

Al: That’s what I’m thinking too. When the two kids move out hopefully the expenses go down to something more manageable to make this work. But you’re right, we don’t know Social Security or pension. And maybe there’s both, maybe one, maybe there’s neither. I don’t know. Usually there’s at least one.

Joe: So here’s the math that everyone needs to be taking a look at. So Patty wants to retire at some point. She doesn’t even know if it’s even feasible. So you gotta start with the date and let’s just push it out 10 years. So if she spends $8000 a year today, $100,000, right? Then you gotta inflate that a little bit with inflation over a 10 year time period. So maybe that’s $130,000, give or take. But then you subtract out your fixed income. So let’s say she’s got a pension of $20,000 and she’s got another, Social Security of $30,000, so that’s $50,000 off the $130,000. So now you’re back down, you’re short $80,000, right? And so you would take the $80,000, which would be needed from liquid investments, and we would divide that, let’s say by 4%. So she would need roughly $2,000,000.

Al: $2,000,000 or multiplied by 25, if that’s easier to think about it.

Joe: So at $2,000,000, she’s got $200,000 now. A little bit more than that. They’re contributing 9% of her income. So let’s say over the next 10 years, she’s gonna have roughly, I don’t know, $600,000, $700,000. So she’s halfway home at 67, right? So there’s 3 things she can do. She can work longer, save more, spend less.

Al: Yes. Yeah.

Joe: Or a combination of all 3.

Al: Yeah. Or, and/or work part-time in retirement.

Joe: Yeah, work, part-time. Yep.

Al: But yeah, that’s what it comes down to. And let’s say- let’s say if you do the math and it comes out to you can- you’ll be able to make this work if you spend $6000 a month instead of $8000. Which means you can save more, number one, and number two is you have less that you have to produce from your liquid assets. And then maybe that works in 10 years. And if that’s your- if that’s what you’d like to do, then get on that plan. You just have to figure it out. And it’s tricky with two kids. I get it. And maybe for the next few years, you won’t be able to do that, but maybe after that you will. Or maybe you have the same spending for another 4 years or whatever it may be, and then you reduce your spending and then you rerun your calculation. Maybe instead of working to 67, you work to 69. There’s lots of ways to skin this cat. But the good thing Patty, for you to know is you’re starting with something and you’ve got money being saved every month.

Joe: Or, this looks okay, $120,000 of income. Very good income. She’s got $1,000,000 home. That’s a huge asset. And she’s already got some good savings going on. So if she’s got time, she’s got one kid in school, $250,000 in the 529 plan. Okay. So school’s taken care of. You just gotta get the other kid out in 4 years or 3 years, 3 and a half, depending on when he started or when he graduates. It’s like, all right, do you wanna downsize? Maybe that frees up cash, you save a little bit more money, you do a combination of 3 or 4 different things, pull some levers and you’re gonna be right there.

Al: Yeah. And one more thing, we didn’t say that you’ve got a bunch of equity in your home, presumably more in 10 years. Do you wanna live there forever? Great. If not, if you wanna move to another area that’s a little cheaper, now you’ve got some extra equity that you can turn into liquid investments to supplement that cash flow too.

Joe: All right. Have a Cabernet and relax.

Retired, Income Dropped, Enrolled in Medicare. How Long to Get Off IRMAA? (Randy, Hb, Ca)

Joe: Let’s go to Randy. Just-

Andi: I think that’s HB, which is Huntington Beach.

Joe: Okay. Huntington Beach, California.

Andi: I think so, yeah.

Al: Yeah. Okay, that makes sense.

Joe: “Just enrolled in Medicare, paying top level of IRMAAA. Just retired, so income dropped. What is the process and timing of getting off IRMAA?”

Al: That was direct and to the point.

Joe: Thanks Randy. Was that like, little robot?

Al: Yeah. That was an AI person question.

Joe: Exactly. So basically what happens with- what IRMAA is, is your Medicare part B premiums. And so depending on what your income is two years ago, is what your premium’s gonna look like.

Al: Yeah. And so presumably if you were working two years ago and then you retired, your income is lower now. But the premiums are based upon two years ago. So you can actually contact Social Security Administration, not Medicare, Social Security Administration and tell them your income has been reduced. And so that’s how you do it. There’s lots of reasons why it could be reduced like a marriage, divorce, like stopping work maybe, which is the case here, loss of income-producing property, major change or termination in your employer’s pension plan, blah, blah, blah. There’s things like that, that will allow you to change that income from a two year look back, but you gotta go to your Social Security office to do that.

Joe: All right, hope that helps. Randy.

How to Plan for Unknown Future IRMAA Income Limits?

Joe: “Joe, Big Al. Return caller here.” Okay, so “my IRMAA bracket is $306,000 in 2023, up from $28,400. So I should keep my income under the $306,000 in planning for 2025 to be safe? What is the 2023 limits going to affect if I don’t know the 2025 limit? Help me understand this so I can keep my income in a comfortable bracket. Still drinking red wine. Enjoy the show. Keep up the humor.” So IRMAA limits, so she’s looking at- because it- what they do is they look at your income two years before to determine what your Medicare premiums are going to be. And she’s asking, so do- where do I keep my income? I don’t know what- where the income limits are gonna be in 2025. So I gotta do the planning this year for that. So help her understand what mess this is.

Al: Yeah, it’s an interesting question. So here’s the rule, is the income that you had two years before affects the Medicare premiums that you’re gonna have to pay. So in other words, income that you have in 2023, yes, will affect 2025. But we don’t know what those limits are. You don’t know them and neither do we. We just know what the 2021 limits are, which is the figures that you just mentioned. So $306,000 would be the top of a bracket, and this is back in 2021, your premium would go from $329 to $428 if you went like a dollar over. So that’s $100 a month, $1200 for the year. As far as what will the brackets be in 2023? Almost definitely they’ll be higher because there’s inflation. Or if there’s no inflation, it’s at least gonna be equal. So I personally would just plan with the $306,000 to be safe if you have that ability.

Joe: Yeah. I mean, we’re splitting hairs here.

Al: I know, right? Exactly.

Joe: All right.

So many of the emails we receive at YMYW highlight the uncertainty that comes with planning for retirement – we don’t even know what things will look like 2 years from now. To get a handle on what a mess this all can be and to flesh out the financial details of your retirement, click the link in the description of today’s episode in your favorite podcast app, go to the podcast show notes and download the Retirement Readiness Guide for free. Learn little-known secrets about controlling your taxes in retirement, creating income to last a lifetime, how to make the most of your retirement investing strategy, and much more. These 7 plays will help you get retirement ready, despite the uncertainties we may face with market volatility and inflation, rising healthcare costs, the future of Social Security and Medicare, and even those IRMAA income limits. It won’t cost you a dime, so click that link in the description of today’s episode in your favorite podcast app, go to the show notes, and download the FREE Retirement Readiness Guide.

“Re-Doing” Social Security: Can You Stop Taking Benefits After Claiming Early? (Lauris, Volcano, Hawaii)

Joe: We got “Aloha. My understanding is there two times one can stop receiving Social Security benefits after claiming them early, within a 12 month of claiming, which requires paying back all benefits received within those 12 months and at full retirement age. Is my understanding correct? If the second option is taken, is there a waiting period to file once again for benefits? Is there a mandatory age to file for Social Security benefits?”

Al: “Mahalo” or thank you for your time. So this is Lauris from Volcano, Hawaii, which is actually a town near Volcano National Park. Lovely town. It’s actually, you would think it’s, it would be a barren wasteland near Volcano National Park, which is a barren wasteland, but it’s actually in a rainforest.

Joe: Wow.

Al: Very pretty.

Joe: Look at you.

Al: Yeah, I’ve been there.

Joe: Yeah. I’ll answer number one. If he claims- or If Lauris claims, yeah, you can pay it back within 12 months.

Al: And also, if you claim your retirement benefits before full retirement age, you have to wait till full retirement age and then you can suspend them and by suspending them, you’ll stop receiving benefits. But you’ll get those delayed retirement credits and you can restart them up any time. Either at age 70, if you do nothing, which is the last date to claim Social Security. Or you could do it sooner. And if you wanted, let’s say at age 67, you realized, okay, I need the benefits now, you just contact your Social Security office, they’ll turn the benefits on and it will be higher than it would’ve been because you had two years of delayed credits or one year, whatever the full retirement age.

Will Spousal Social Security Benefit Amounts Change When One Spouse Files? (Philip, Los Angeles)

Joe: We got Philip from LA. “Hey Joe. I love the humorous content mixed with some amazing financial knowledge.” Look at that. No mention of Big Al.

Al: The last one was for me. This is for you.

Joe: Yeah. “I live in Los Angeles and I have a question about Social Security for my parents. My mom is 67 and hasn’t made any income in the past two years, but worked for about 10 years prior. My father is 68 and he’s worked his entire adult life. They both received letters from Social Security with the amount that they will receive in retirement. My mom is about $1000 a month at 67. My dad is close to $3000 a month at age 70. Will the amount she is due to receive from Social Security change once my dad applies for his Social Security benefit? Or will stay the same for the rest of her life? Do you recommend for both of them apply at the same time? Thank you, Philip.” Here’s what’s gonna happen, Phil, is that she’s got $1000 a month coming at age 67. His dad’s gonna wait until age 70 to claim at $3000. The spousal benefit is gonna be half of his dad’s full retirement age benefit, which is probably $2400.

Al: Yeah, it’s less than the $3000.

Joe: It might be $2200, so you cut that in half. It might be $1100. Her benefit is gonna be $1000.

Al: So it may not be that much different.

Joe: It’s gonna be, yeah, a couple of bucks. So she’s gonna claim hers at age 67. Once he claims that at 67 they’re gonna take a look, and then they’re gonna put her benefit plus the spousal. And if it’s higher, if there’s gonna be an adjustment, then they’ll make that adjustment at that point. But no, if she claims her benefit at full retirement age, she will not be penalized on a lower benefit. She can claim it as early as 62, but she’s just gonna receive a lower benefit and then the spousal is gonna be also lower. So if she waits until her full retirement age, I think- you’re splitting hairs here just because the benefits just worked out to where they were. If the benefits look differently, maybe you would- maybe I would- and maybe if I had some more time and some calculations and more facts, I would give advice. But just looking at the surface and spitballing this, I would say-

Al: I think you’re kind of on the right track. The actual answer is to go to financial planner, have it run through their Social Security analyzer to get the full answer. But it seems like mom’s benefit will be roughly the same as half of your dad’s benefit, so it may not matter that much.

Joe: Yep.

SECURE 2.0: When Must You Pay Taxes on Company Match Retirement Contributions? (Jim, Dallas, TX)

Joe: Got Jim from Dallas, Texas. “Your latest podcast with SECURE 2.0-“

Al: You got the accent going.

Joe: I know.

Al: Like it.

Joe: I’m trying.

Al: Like it much.

Joe: Taking advantage of that company match. “In the podcast noted that once you elect to receive the company match after-tax, that it’s taxable then and will have to pay taxes on the match. But when? Many companies have a vesting schedule when the employee will have to remain employed over a period of years before they can vest or be eligible to receive the company match. If the company match is now taxable, is it taxable in the year that you received a company match? Or is it taxable when the company match is fully vested? One of my favorite podcasts. Keep up the good work. I drive a 2022 Honda Pilot and prefer red wine as my doctor said it helps keep control of my cholesterol.” I have no idea.

Al: It’s a good question and it strikes me that our government hasn’t really thought this out very well.

Joe: Do they have to change the plan?

Al: I’m guessing. I haven’t seen any details on this but typically here’s what I would guess, without knowing the intent of the law, cuz I haven’t read the 1500 pages or whatever it was. Is this, is that- and you’re right. So if you want the employer contributions, in other words, the match part to be Roth, then you have to pay the taxes on those. But I’m guessing it’s when they vest, not when they happen, but I don’t know that for sure.

Joe: And I read somewhere that if, let’s say if they don’t have a Roth component in the 401(k) and someone elects, it’s like, no, you don’t get that, because the plan, the company has doesn’t allow it and they don’t have to necessarily change the plan.

Al: And furthermore, I don’t think a single company has this option right now because this law just passed in late December. Now we’re in early February. Here’s what I think is gonna happen. I think that over the next several months, companies are gonna try to do this and they’re gonna run into this, and then the IRS is gonna have to come up with some pronouncements on how to handle this. I’m not even sure it’s been thought through, to be honest.

Joe: Yeah. I haven’t seen a vesting schedule on a match in a long time either.

Al: On a safe harbor, no. But on a regular 401(k), yes.

Joe: Didn’t we get blown up just recently too, because we talked about top heavy and the guy’s like, you’re an idiot, it’s not top heavy.

Andi: That was an email that actually it just came in today, so it’s not even on your list.

Joe: I just saw ‘you guys are idiots’.

Al: We get those all the time.

Joe: I know. And so those are the only ones I read when they come in.

Al: Yeah, if it’s a safe harbor, I think generally there’s no vesting. So you’re gonna pay it when it happens. But if there is a vesting schedule and non-safe harbor ones generally have a vesting schedule, right? I think. Then I think it’s gonna be when it vests.

Joe: You think? I don’t. Non-safe Harbor plans have vesting schedules?

Al: They don’t have vesting- Did I say that backwards?

Joe: Yeah.

Al: Yeah. So safe harbor plans do not have vesting, but a regular 401(k) plan often does have vesting.

Joe: Often? I would just say ‘may’, just be safe.

Al: The funny thing is, is we don’t see a lot of regular 401(k) plans anymore.

Joe: Yeah, we do. All the time, because the bigger companies are not safe harbor.

Al: For large companies. Yeah. But I guess well- but it has to be a pretty large company for it to be that.

Joe: So here’s the answer. We don’t know . We don’t know- Anything. We’re not actuaries, we’re not TPAs and we’re not 401(k) administrators. What was the guy’s name that blew us up? Doesn’t he have some resources? He’s like here, you guys gotta-

Al: You gotta start over.

Joe: You gotta start over.

Andi: That was Debra.

Joe: Or Debra. Okay. Debra. Thank you Debra. And she gave us some resources.

Andi: Yeah, she did. Napa-net.org.

Joe: All right. We’ll study up-

Al: – for next time.

Joe: Or we’ll just not read these 401(k) questions.

I’ve now provided that email to the fellas, so we’ll cover that momentarily. In the meantime, season NINE of the Your Money, Your Wealth TV show started this past weekend! Visit the podcast show notes at YourMoneyYourWealth.com to watch episode one and download the companion guide. Joe and Big Al walk you through steps and strategies to Turbocharge Your Retirement: rally with Roth, run with risk, and put the pedal to the metal on your Social Security benefits. Click the link in the description of today’s episode in your podcast app to go to the show notes, Turbocharge Your Wealth, and to Ask Joe and Big Al On Air.

CORRECTION: ACP Test for Safe Harbor 401(k) Plans, After-Tax Contributions (Debra, St Louis)

Joe: Answering your money- or we’re trying to answer your money questions.

Al: We, we do our best.

Joe: Yeah. Sometimes we just blow up.

Al: It’s spitball or, or sometimes we say what we know and we may not have complete information. But that’s what the show is.

Joe: Yeah. You know how much we prepare? I print out these questions 30 seconds before we walk down to the studio. So we screwed up on some ACP test for Safe Harbor 401(k) plans. So Debra St. Louis writes in, “Hey Big Al, Joe and Andi, Adore your podcast. All 3 of you are so fun and really help so many people out. I have a bit of experience in the old 401(k) world, so I thought I would provide some feedback to the question this week on after-tax contributions in a Safe Harbor plan. You are correct- you correctly told the caller that the after-tax contributions would be included in the ACP test, even if they were rolled out.” Winning. Way to go Big Al. Good job.

Al: So far, so good.

Joe: Okay, so far we got a little A+ going here. Okay. All right. Where am I? Oh, “You mentioned the word top-heavy-“ Oh boy. I think that was me. That was- saw a buzzword.

Al: Did you screw up on that?

Joe: I don’t know. I thought I’d throw in a buzzword- when the 401(k) plan’s a little top-heavy-

Al: I know. That’s the- that’s the term we know.

Joe: You sound like you know what the hell you’re talking about, “-which was out of context.” Well, of course it was. It’s a buzzword. I didn’t know what the hell I’m talking about. I guarantee you 95% of our listeners were like oh, top-heavy-

Al: Oh, that’s wonder if I got that?

Joe: Wonder if I got a top-heavy plan? I get Debra’s like, yeah, Joe’s such an idiot. Totally out of context. Alright, busted. Fail for me. “But, I don’t think that any harm was done.” Okay.

Al: So you didn’t screw people up.

Andi: Vindicated.

Joe: “No harm, no foul.” Okay. “It is just an entirely different test from the ACP test.”

Al: So that’s the buzz- ACP test is what we should have said.

Joe: Yeah. “When you might need a friend like me is- you said that a Safe Harbor plan doesn’t need an ACP test? While that is normally true, it is not true if there are any participants that contribute after-tax contributions.”

Al: Ooh. So I didn’t know that. Okay. So that’s helpful, Debra.

Joe: Okay. “I’m providing the link and the article from the esteemed organization that also points out the treasury reg that explains this. I just figured you might enjoy learning this. Happy learning. Thanks for all you teach us.” Well, thanks, Debra. That was my bad. I like just to throw out words.

Al: But that’s a nice way to correct us. You love the show. Some of what you said was like, right on.

Joe: Right. And, you know, there’s- just taken out of context.

Al: Yeah. Didn’t hurt anybody.

Joe: Debra needs to coach me on my management style. I wish I could-

Andi: I’ll say.

Joe: It’s like, what are you doing?

Al: Oh boy.

Andi: And I’ll put that link to the esteemed organization into the podcast show notes so that folks can read that if they’d like.

Al: But, but I didn’t- I thought Safe Harbor plans didn’t need this test, but apparently they do if you have after-tax  money.

Joe: After-tax.

Al: So that’s what I learned that from Debra. Thank you, Debra.

Joe: Because they’re top-heavy.

Al: Because- apparently not. That’s outta context. Joe.

Joe: Okay. They’re not top-heavy. Whatever. They’re bottom-heavy.

Al: That’s a whole different test for a different day.

Joe: Oh man.

Al: What is- when is top-heavy? I’m not even gonna guess. Let’s not even guess. Cuz we’re getting- Debra’s gonna send-

Joe: I dunno. I thought top-heavy was like when the people that make the most money-

Al: Yeah, me too.

Joe: -they wanna make it even. And so you’ve got all the executives with-they’re getting the tax benefits by putting all this money-

Al: Because we see this all the time. The executives, then they have a 1099 with income because they put too much into the 401(k). I thought that was top-heavy too. Maybe it’s something else.

Joe: So, but, and then the rank and file, might be doing some clerical work that’s making pennies on the dollar compared to the executive is not contributing to the plan. So all the top execs are top-heavy-

Al: Which is why I thought that most firms that could switch to a Safe Harbor so they wouldn’t have to worry about that. But now there’s a little wrinkle. If you have after-tax money allowed, then you gotta-

Joe: So if she’s in the biz, maybe she can set up our 401(k)plan.

Al: Yeah. Cuz we don’t- our provider doesn’t think you can do after-tax. And we’ve said, yes you can.

Joe: I’m in the business. I understand this very well. Well, obviously we’re not top-heavy.

Al: No, you can’t. We just checked with legal. It’s impossible.

Joe: Oh boy. All right. Well thanks Debra. If you guys wanna write in, give us questions, give us comments, give us feedback, anything you want. It’s fair game. We got thick skin.

Al: Yeah, we do. I don’t care.

Joe: Yeah, we haven’t gotten a one-star lately. Hopefully- I don’t know what’s going on there.

Andi: Keep trying, Joe.

Al: It’s bound to happen.

Joe: Statistics, right?

CORRECTION – Medicare Test: Creditable Drug Coverage (Steve, Las Vegas)

Joe: Another correction, Big Al.

Al: Got a lot of corrections this week.

Joe: Yep. This one comes from- very legal-ee-

Al: From Steve, Steve O. from Vegas.

Joe: Steve from Las Vegas. “Andi Last, Joseph Anderson, right?

Al: It’s got all our names. Then Pure Financial, then Your Money, Your Wealth® radio show, and then info@purefinancial.com, preceded by the date. And at the very top- we were thinking, oh, this is an attorney. Where’s the word, subpoenas?

Joe: Summons? Oh, man. “I’m referring to the YMYW live podcast at 6:00 AM on Saturday, February 4th, 2023.”

Al: You got that figured out?

Joe: Yeah. “Recall, a married listener who sent a letter into YMYW. W of the couple is employed. The couple enjoys health insurance provided by W’S company and that insurance covers both husband and wife. H of the couple is over 65 and non-employed. The question revolved around whether H can delay enrollment in Medicare“

Al: Okay. I sort of remember that.

Andi: I think this might have been Jim from Santa Cruz.

Joe: Anytime there’s a Medicare question, I just totally like, don’t know. Start thinking about previous listeners’ drink of choice.

Al: Got it. What kind of car are they drive?

Joe: Yes.

Al: What they’re doing?

Joe: “You mentioned that the company through which the health insurance is made available must have 20 or more employers. That is correct.” Big Al. Boom.

Al: Yeah. It is correct too, to delay signing up at age 65.

Joe: “However, you failed to mention something, sir, that is very important.”

Al: Okay. All right. What was it?

Joe: “The health plan must provide credible drug coverage. Most health plans do not.”

Andi: They do.

Joe: “Most health plans do. But a minority of health plans provide drug coverage, which does not meet the Medicare test. How do you find out? Ask your human resources department, drug plan, benefits manager or outside contractor which manages insurance coverage for the company. In every September, covered individuals who are over age 65 and enrolled in the drug plan associated with this company’s health insurance should receive a notice from the employer or plan informing the covered person if the drug coverage is credible-“

Andi: “-creditable-“

Al: Let’s take a little nap break?

Joe: Okay. We get it. Is there anything else we wanna talk about? “Thank you, Steve.” Well, you can read this story about Medicare enrollment from Duke and in parenthesis John Wayne in Knoxville, Tennessee on the next page. Okay. But hey, John, appreciate that. So yeah-

Andi: That was Steve. That was Steve.

Al: Steve. Steve. All right. That’s good actually, I didn’t know that either.

Joe: Good info.

Al: I’ve been schooled twice already.

Joe: You kinda get that drug coverage.

Al: Yep.

Joe: So oh, this is Steve. “I listen to YMYW online on News Radio AM 600 KOGO San Diego.” Online. “I do not drink alcohol beverages, and I use public transportation.”

Al: Cool.

Joe: “Love you and love your program.”

Al: All right, well, that’s very nice way to end.

Joe: All right.

Andi: More of that managing from beneath.

Joe: More managing-

Al: – from beneath. Okay.

Andi: He’s giving you the nice stuff and the critique all at the same time.

Al: Got it, got it.

Joe: Managing from beneath. Is that like in beneath where?

Andi: Beneath authority.

Al: Down under.

Andi: The rank and file managing the managers.

Al: Under something-

Joe: -like underground? like a tunnel?

DUKE’s Medicare Enrollment Experience (DUKE (John Wayne), Knoxville, TN)

Joe: “I wanna share my experience regarding your spitball of delaying Medicare enrollment from Jim from Santa Cruz at the end of show 416.” Okay, let’s hear it.  “I turned 65 in 2022, enrolling in Medicare Part A disqualified contributions to my high deductible health savings account. After reaching and visiting to the local SSA office, I accepted their statement to avoid premium penalties. I must enroll in Medicare with my enrollment period 3 months before, 3 months after my 65th birthday, I explained my social security Medicare situation, including delay SSA enrollment to age 70 to receive the higher benefit and continue my employer health coverage for myself and my wife. To avoid the premium penalty, I was instructed to only enroll in premium free Medicare part A, hospitalization. Everything was great until January when I was notified by the HDHP I no longer qualified for contributions to my high deductible HSA.” Yeah, the age is 65, Duke.

Al: Yep. That That we do know.

Joe: Yeah. “Our health insurance coverage continues and we can brokerage account the HSA contributions. The only thing really I lost was a $3000 a year employer HSA contribution. The lesson is to ask everything you can think of when dealing with the Social Security offices. They often have their own misunderstandings of the complications created by the government controlled regulations.”

Al: Got it.

Joe: Yes, I agree.

Al: I agree with that too. And I, I would go even one step further, and the reason is because this is really, really complicated stuff and not everyone understands it all. I would take what Social Security tells you. But I would do some my own research just to make sure you believe it’s correct. And that’s not a dig on Social Security people because it is very complicated.

Joe: And they can’t give advice.

Al: No.

Joe: So people are asking for advice and they’re like, well, I can just tell you what the rule is.

Al: Yeah. Right, right.

Joe: Well, what do you think? How about this circumstance? What would you do? You know, that’s why you go to us. We’ll spitball it for you.

Al: Yeah. And be right-

Joe: – 50% of the time.

Al: – less than half the time.

Joe: It’s like that Sex Panther-

Andi: What?

Joe: Sex Panther Cologne. Yeah.

Al: Okay. Half the time you-

Joe: 50% of the time it works 100% of the time.

Al: Got it.

Joe: It’s Ron Burgundy. I think that’s-

Al: Oh, that came from him?

Joe: Yeah. It’s a great movie.

Al: Yeah, well, Idyllwild Town Crier, their slogan is Most of the News, Some of the Time.

Joe: There you go. All right. That’s it for us. See you next time. The show is called Your Money, Your Wealth®.

Andi: Joe’s chest cold and volunteering to get away from the office in the Derails at the end of the episode, so stick around. Help new listeners find YMYW! Tell your friends to follow the podcast and leave your honest reviews and ratings for Your Money, Your Wealth in Apple Podcasts, and any other podcast app that accepts them, like Amazon, Audible, Castbox, Goodpods, Pandora PlayerFM, Podcast Addict, Podchaser, Podknife, Spotify, and Stitcher.

The Derails

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