Year End Information - Medicare, Open Enrollment & Social Security
As 2022 winds down and everyone looks ahead to the New Year, it's worthwhile to look at your end-of-year checklist and ensure you are not missing out on any opportunities. All weeklong, Infinity Wealth Counsel will be sending you information that will focus on taking the right steps today for a wealthier tomorrow. Some of these topics may just be news headlines to make you aware of upcoming changes, others may be guiding you towards making some small, yet crucial financial decision before the years end. We hope you enjoy this weeks information, and if you have any questions, we are always here for you.
Social Security Benefits
The 70 million Americans who receive either Social Security and/or Supplemental Security Income (SISI) will be receiving a benefit increase of 8.7% in 2023. The average Social Security payment will increase from $1,681 to $1,827. This is the largest raise in social security payments since 1981.
In addition, recipients who have not met full retirement age, will now be able to earn up to $21,240 without a reduction in Social Security benefits.
While Social Security payments will increase, base Medicare premiums are expected to decline by about $5 per month to $164.90. Medicare premiums are income based, with higher income individuals paying as much as $560.50 per month.
Medicare Open Enrollment
Open enrollment runs from Oct. 15 through Dec. 7, giving beneficiaries a window in which to switch between Medicare plans, including traditional Medicare part D prescription plans and Medicare Advantage, the private insurance alternative to the government insurance plan.
Medicare offers a plan finder to help enrollees compare Medicare health and drug plans. The plan finder provides information about costs and covered drugs, as well as star ratings of various Medicare Advantage and Part D prescription drug plans. The star ratings are updated annually and incorporate the experiences of people who use the plans.
In general, your first time enrolling in Medicare is your best opportunity to get a Medigap (or Medicare Supplement policy which covers expenses such as co-pays and deductibles which not covered by traditional Medicare. If you miss the initial enrollment, preexisting conditions may make this coverage more expensive or unavailable.
Social Security/Medicare Taxes (FICA)
Unfortunately, for those of us who are still working, social security taxes are also increasing. The tax rate of 7.65% for employees or 15.3% for self-employed individuals will now be assessed on the first $160,200 of income. The rate falls to 1.45% (2.9% self-employed) up to $200,000 of income. And finally, the rate increases to 2.35% (4.7% self-employed) on income over $200,000.
Be on the lookout for emails coming from us over the next several days as we share more year end information that may affect you and your family. If you have questions about any of the topics, or you want to discuss it further, please call our office and Chris or Matt will talk about how these issues may affect you.