How to Not Let Healthcare Expenses Derail your Retirement


Video Brief

In a recent episode of Retire Ready TV, Chris Heerlein of REAP Financial, a wealth management firm in Austin, Texas, emphasizes the significance of effectively managing healthcare expenses, a major concern for retirees. Heerlein draws attention to an often-overlooked aspect of retirement planning: Medicare IRMAA (Income-Related Monthly Adjustment Amount) surcharges. These surcharges can significantly increase Medicare premiums for those with higher incomes, impacting families who have diligently saved for retirement or maintain a comfortable lifestyle. Heerlein points out that many are caught off-guard by these additional costs and underscores the importance of understanding how Medicare premium increases work. He advises retirees to strategize for controlling these costs, particularly focusing on the impact of Required Minimum Distributions (RMDs) that commence at age 72. These mandatory withdrawals from IRAs and 401(k)s can inadvertently increase income, leading to higher Medicare premiums.

Heerlein suggests a couple of strategies to mitigate these effects. One is the Qualified Charitable Distribution (QCD), where retirees can use their RMDs for charitable donations, potentially reducing their taxable income. Another underutilized method involves the SSA-44 form, which allows for adjustments to Medicare premiums based on life-changing events like retirement. Heerlein encourages viewers to educate themselves further by accessing his 2022 digital report titled “Don’t Let Health Care Expenses Derail Your Retirement.” This report not only covers long-term care and home health expenses but also delves into strategies to avoid higher Medicare costs, which Heerlein refers to as the “Medicare Stealth Tax.” By being proactive and informed, retirees can better manage these expenses and ensure a more financially secure retirement. Send us an email for your copy of our digital report.

Leave a Comment

Your email address will not be published. Required fields are marked *