50+ Lifestyles

The Good News and The Bad News

By Richard J. Schillig, CLU, ChFC, LUTCF
Independent Insurance and Financial Advisor

Before giving both good and bad news allow me to remind you of our November Community meetings continuing both virtually and in-person meetings. We remain in two very important enrollment periods. Medicare Annual Enrollment Period began Oct 15 and runs to Dec 7. Under 65 Major Medical enrollment period began Nov 1 and runs to Jan 15. These enrollment periods allows us to make changes in our choice of insurance plans. Please see our ads or call for more details, (563) 332-2200 or email dickschillig@att.net.

Now – let talk about the news items recently announced. Good news first. Millions of retirees on Social Security retirement income will get a 5.9% boost in benefits for 2022. The biggest cost of living adjustment in 39 years follows a burst in inflation as the economy struggles to shake off the drag of the coronavirus pandemic. The COLA, as it’s commonly called, amounts to $92 a month for the average retired worker, according to estimates released by Social Security Administration. That marks an abrupt break from the long lull in inflation that saw cost-of-living adjustments averaging just 1.65% over the last decade.

Policymakers say the COLA was designed as a safeguard to protect Social Security benefits against the loss of purchasing power in an ever-changing economy. About half of seniors live in households where Social Security benefits provide at least 50% of their income and one- quarter rely on their monthly payment for all or nearly all their earnings.

“Regardless of the size of the COLA, you never want to minimize the importance of the COLA,” said retirement policy expert Charles Blahous, a former public trustee helping to oversee Social Security and Medicare finances. “What people are able to purchase is very profoundly affected by the number that comes out. We are talking about the necessities of living in many cases.”

What’s the ‘other’ bad news?! Congress is also discussing the cost of Medicare Part B and it looks like a $10 increase is imminent. Current base cost of Medicare Part B is $148 monthly per person. Higher earning households will pay more than base cost. But $10 added to the base cost results in a 6.7% increase. Seems to me readers if we are receiving a 5.9% increase in income and a 6.7% increase in cost of Medicare – something is not just right with our system. Our congress should be aware of this increase. But a reminder from constituents will certainly make them more aware.

What can we do about this situation? For my clients I use the ‘split annuity’ investment strategy to help minimize increased costs. Please call on us or email us to determine if this strategy is beneficial for you.

Richard J. Schillig, CLU, ChFC, LUTCF is an Independent Insurance and Financial Advisor with RJS and Associates, Inc. He can be reached at (563) 332-2200.