Social Security has many moving parts.
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In October 2022, the Social Security Administration announced an 8.7% Cost of Living (COLA) increase in Social Security payments. These annual increases are determined by the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
They are designed to help Social Security beneficiaries keep pace with inflation. The idea is for benefits to not lose value over time. This 8.7% increase is the largest COLA increase since 2009. It’s set to go into effect on March 1st, 2023. Social Security is a Federal program, whereas Medicaid is administered through individual state programs. Medicaid rules are complex and vary greatly, so it’s important to be specific with every individual. A good rule of thumb is, if you make less than 100% to 200% of the federal poverty level (FPL) and are pregnant, elderly, disabled, a parent/caretaker, or have a child, there’s likely a program for you.
There have been mixed reactions to the recent COLA increase. Some beneficiaries have rejoiced at the increase in their monthly checks, while others are worried about how it will impact their Medicaid eligibility. Medicaid is a need-based program that provides health coverage to people with limited income and resources. In many states, beneficiaries with income above a certain threshold are not eligible for Medicaid. Social Security income is considered “countable” income in regard to Medicaid eligibility. As an example, someone’s countable income was $1,000 per month before the increase and is now $1,087 per month. This could make them ineligible for Medicaid.
Remember, not all states will be affected by this increase in the same way. There can be more generous or strict income thresholds. some states have “spend-down” provisions, allowing for medical expenses to drop an individual’s income below the threshold. Asset, marital status, and living situation are also factors in determining Medicaid eligibility. It’s always best to have clients speak with a Social Security representative or Medicaid specialist to understand how changes impact their eligibility.
It’s always important to stay informed about any changes coming from the government, such as new CMS marketing rules. Many Medicare Advantage carriers now offer tools to help determine Medicaid eligibility in real-time when sitting with a potential client. In certain states, there are State Pharmaceutical Assistance Programs (SPAP) designed to help with costs, which also create a Special Election Period for Medicare Advantage. Some carriers offer plans that cater to those beneficiaries with partial dual eligibility. It’s important to have the proper quoting tool that shows all plans that are available to you as an agent in your area, such as Connect4Medicare. Be sure to take advantage of the tools available to help your clients make the best decision for their health and finances.
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Vice President - Health Sales
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2023 Social Security is set to increase for approximately 70 million Americans. The cost-of-living adjustment, also known as COLA, will increase 8.7% beginning in January 2023.
According to the acting commissioner of the Social Security Administration, Kilolo Kijakzi, 2023’s COLA adjustment is the first time in over a decade that Medicare premiums are not rising and shows that there is more support for older Americans. On average, this increase will equate to more than $140 per month.
Starting in January, along with the decrease in Part B premiums, Medicare beneficiaries are going to have more money in their pockets for the first time in years. This is going to allow agents to be able to offer and cross-sell products that can help cover gaps in their client’s coverage. Life insurance, hospital indemnity, and dental/vision plans are great starting points when discussing gap coverage options. If you utilize a generic scope of appointment (SOA), hospital indemnity and dental, vision, and hearing products can be discussed during your Medicare appointment!
Pinnacle Financial Services is a full-service “FMO” that is dedicated to helping agents across the country grow their book of business. We have a dedicated sales support team, the best training in the industry, and technology to make your sales a breeze. Don’t hesitate, to call our team today to get your AEP jump-started.
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1 (800) 772-6881 x7731 | sales@pfsinsurance.com
Director of Agent Training
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support@pfsinsurance.com
One thing that is always of importance to discuss with clients is Social Security Benefits. With Covid-19 and the Consumer Price Index increasing there are some new facts that need to be relayed to those receiving Social Security Benefits, and those who are approaching claiming them. The Most important to relay is that there was a Cost of Living Adjustment of 5.9% thus increasing those recipients’ benefits for 2022.
One thing to consider though is that the tax rate for Social Security and Medicare is 7.65%. The Social Security portion (OASDI) is 6.2% on earnings up to the limit of $147,000 of earnings, and the Medicare portion is 1.45% on all earnings. So, in essence, the Cost of living adjustment, although being increased, is still being potentially being consumed with the taxable portion for earnings. Just something to consider.
With that said the timing and when to claim Social Security Benefits is still one that is a personal one and ultimately based on a number of factors. Some to keep in mind: Your monthly benefit will be higher if you delay starting it, you may have a longer retirement time horizon than you might think, Married couples have two lives to plan for, you can keep working, and don’t forget Medicare.
One of the most important things that you can do today is to register on the SSA.GOV website to inform yourself as to your estimated monthly benefit, or PIA. By informing yourself of the monthly amount you can at a minimum have an idea of those benefits and make a determination if this is enough monthly benefit to sustain you for at least a minimum of 25-30 years of retirement.
Some other considerations are spousal benefits if you are divorced and those benefits, and those that apply to someone who has lost a spouse, or survivor benefits. All of these are important provisions to consider in when to claim your benefits, and what you are rightfully entitled to.
This is an important topic to consider whatever your business specialty is. Depending on how knowledgeable you are on this most important of retirement planning provisions for eventual, and already retired individuals, the experts at Pinnacle Financial Services, can assist with solutions, and programs to give you expertise in Social Security planning. Contact us today and we can cater a program that you can use to assist your clients, and prospects to have a retirement that is comfortable, and not stressful.
1 (800) 772-6881 x7731 | sales@pfsinsurance.com
Senior Sales Director | Life, Annuity, & LTC
1 (800) 772-6881
support@pfsinsurance.com
One of the most important areas that need to be considered on the success of your retirement is having enough funds. When you stop working and receiving a regular income you want to be able to maintain your lifestyle. How do you accomplish this important fact, and what strategies are necessary to sustain and thrive in retirement? The answer for many is Social Security and Annuities.
Social Security is a primary leg of that retirement as well as private annuities. Social Security is a right that is earned based on working history and earning enough credits to receive an income when you ultimately retire. By having a guaranteed payment from Social Security, it is also advisable to have an annuity that will also provide a parallel guaranteed income as well. Taking into consideration what age you stop working, will be a huge determining factor in the actual Social Security benefit that you receive, as well as potential tax liabilities on your Social Security benefit when you start receiving Social Security. By planning your own personal Social Security maximization strategy, an annuity can help cater and provide the income necessary to truly provide for your specific retirement income strategy.
It is important to work with a professional that understands all the rules of Social Security and when your personal maximization strategy is. Determining your optimal claiming strategy for Social Security will lead to a more comfortable retirement. There are many strategies that can be employed, and the use of a guaranteed lifetime annuity can offer that additional income to complement your Social Security payments. The idea, and the importance of having multiple sources of guaranteed lifetime income, will be the strategy that can’t eliminate all pitfalls for a successful retirement, but it will alleviate some stress from the retiree, by providing something similar to a consistent paycheck like they had when they were working. The topic of Social Security, and the addition of the annuity option to this overall planning, as well as the consideration of other options to create income during retirement, are all now the most important considerations for a pre-retiree, and retired individual to consider moving forward. The common studies now show on average that a man 65 will live 20 years in retirement, and a female age 65 will live 22 years in retirement. Costs of healthcare, basic living expenses, and other unplanned expenses, will require funds to pay for them, and calculating your foundational income sources is of the utmost importance. Many different calculators are available to help you plan, but having a trusted advisor to assist you with these topics and plan for them accordingly.
At Pinnacle Financial we can assist you with the actual Social Security Maximization Strategies, as well as making recommendations with guaranteed lifetime income annuities to help supplement the Social Security income to have a successful and stress-free retirement. This is probably the most important planning that you can do with a client to make sure that your clients can be informed and comfortable when they finally stop full-time work and transition to retirement. Pinnacle Financial is here to help you with this and is an expert with this planning.
1 (800) 772-6881 x7731 | sales@pfsinsurance.com
Senior Sales Director | Life, Annuity, & LTC
1 (800) 772-6881
support@pfsinsurance.com