• Health Insurance Before and After Retirement

    Most employees depend on their employers for health insurance today. It is possible to go into the open market and buy an individual health insurance policy under the Affordable Care Act, but these policies tend to be expensive. Premium subsidies are available, but only if you meet asset and income limitations. Of the insurance options available to working people under age 65, their own employer plan—or a spouse’s plan if available—is likely to be the best choice.

    If a client retires before age 65, they will have to find different insurance to take effect immediately after the employer insurance ends. If the client’s former employer offers retiree insurance to tide them over to Medicare age, great. Or, if the spouse is still working, the client may be able to get on the spouse’s plan. If neither of these options is available, the client may go onto COBRA, which will keep the employer insurance in force at full cost to the client. As a last resort the client will need to go into the open market and buy an individual policy to last until Medicare starts at 65. The cost of this pre-65 insurance will, of course, need to be figured into the post-retirement budget, and the client would need to be confident about covering the costs before making the decision to retire.

    Once a client turns 65, the Medicare option becomes available. If a retiree has an ACA plan, they will leap at the chance to get into Medicare in order to lower their costs. If they have a retiree plan, they will be forced to have Medicare, either because the retiree plan ends at 65 or shifts to secondary payer status (serving as supplemental insurance) with Medicare as the primary payer. If they are on a spouse’s plan, and if the plan covers 20 or more employees, they may be able to stay on the spouse’s plan. But take note: Some plans specify that dependent spouses must enroll in Medicare upon turning 65. So if a client turns 65 while on a spouse’s plan they will need to check with the plan to see if Medicare enrollment is a requirement. (An over-20 plan can’t require an employee to enroll in Medicare, but it can require it of a dependent spouse.)

    Related: Original Medicare vs. Medicare Advantage

    Once Medicare becomes an option, by virtue of the client turning 65, health insurance should be reevaluated. Even if a client is still working and staying on an over-20 employer plan, or retired and staying on a spouse’s plan, the existing plan should be compared to Medicare, either traditional A and B with a drug plan and supplemental insurance, or a Medicare Advantage plan. Overall, employer insurance isn’t what it used to be: deductibles are up, cost-sharing is up, and certain specialist services may be hard to get. Clients should not assume that their employer insurance is better than Medicare paired with a good supplemental policy. It may be, but they don’t know that until they’ve compared benefits and potential out-of-pocket costs of both plans under their expected health care usage.

    And that’s another thing that might change along with the passing of the client’s 65th birthday: they may need more health care services as they age. Employer plans are designed for younger, healthier populations. Deductibles can be high because employees don’t expect to get sick; in fact high deductibles are welcome if they keep premiums low. But high deductibles can be devastating for people who do get sick, or who contract conditions requiring expensive prescription drugs. Then you want a plan designed for more frequent and expensive health care usage. That’s Medicare, along with a supplemental policy and prescription drug plan or a Medicare Advantage plan.

    Source: Horsesmouth, LLC
    Horsesmouth, LLC is not affiliated with Lane Hipple or any of its affiliates.

  • Understanding New Jersey’s Senior Freeze Program

    Navigating Property Tax Relief in the Garden State

    Understanding the importance of financial planning for seniors, the State of New Jersey offers the “Senior Freeze” Program, a property tax relief initiative designed to stabilize property taxes for eligible residents. This program is specifically for those aged 65 and older, providing them with the opportunity to freeze the amount of property taxes they pay at a level established in a base year, protecting them from future tax increases due to rising property values or rates.

    Eligibility Criteria: To qualify for the Senior Freeze Program, applicants must meet several criteria:

    • Age – Must be 65 years or older on December 31, 2022, or receive Social Security disability payments on December 31, 2022, and also on December 31, 2023.
    • Home Ownership – Must have owned and lived in or leased a site in a mobile home park for a manufactured or mobile home that they owned since December 31, 2019, or earlier.
    • Taxes – Must have paid all 2022 property taxes by June 1, 2023, and all 2023 property taxes by June 1, 2024.
    • Income Limit – Have an annual household income of $150,000 or less in 2022 and $163,050 or less in 2023. With some exceptions, all income must be taken into account, including things such as Social Security and pensions.

    Click here to find out if you are eligible

    Benefits: The primary benefit of the Senior Freeze Program is the ability to lock in the amount of property taxes paid at the level of a designated base year. This means that even if property tax rates increase, eligible seniors will continue to pay the amount they paid in their base year, effectively freezing their property tax burden. This can provide significant financial relief and stability for seniors living on fixed incomes.

    The program also includes provisions for reimbursement of the difference between the amount of property taxes paid in the base year and the amount paid in the current year, subject to the program’s rules and limitations. Here are some Frequently Asked Questions.

    Application Process: Interested seniors can apply for the Senior Freeze Program by completing an application form available here on the New Jersey Department of Treasury’s website. It is important to apply within the specified deadlines and provide all required documentation, including proof of age, residency, home ownership, and income. The deadline for submitting the 2023 application is October 31, 2024.

    The Senior Freeze Program is a testament to New Jersey’s commitment to supporting its senior residents, ensuring they can enjoy their retirement years without the worry of increasing property taxes. For more detailed information and assistance with the application process, seniors are encouraged to visit the official New Jersey Department of Treasury website or contact their local tax office.

  • The New Retirement Rules

    Highlights of the SECURE Act 2.0

  • Social Security Gets Biggest Boost Since 1981

    The Cost of Living Adjustment, or COLA, from the Social Security Administration (SSA) is announced every fall and has major implications for the 66 million people who receive benefit checks. With inflation surging, retirees need help maintaining purchasing power. The agency announced its 2023 COLA will be 8.7%, the highest since 1981.

    For those concerned about medical costs eating into this increase, Medicare – the health insurance plan for older Americans – said last month it would drop its premiums next year by about 3% for its Medicare Park B Plan.

    For more information and context, please read this article from CBS News.

    For instructions on how to sign up for a “my Social Security” account with the SSA, which is the fastest way to find out when and how much you will receive, watch the video below: