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Social Security and Medicare changes for 2012

Friday, 11 November 2011

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For the first time since 2009, social security recipients will get a 3.6% cost-of-living adjustment (COLA). The COLA adjustment will also affect other areas:

The maximum amount of earnings subject to the social security tax will increase from $106,800 to $110,100.
The minimum amount a worker must earn to qualify for a quarter of coverage under social security is $1,130.
The amount a social security recipient can earn before having to forfeit social security benefits is increased to $14,640. This only applies to people that are receiving benefits before their “Full Retirement Age” (FRA) and are also receiving wages. For example, if you started to receive benefits at age 62 and your FRA is 66, you cannot earn more than $14,640 in wages without being penalized. The income limit does not apply to investment or pension earnings.

Medicare also just announced their premium adjustments for 2012. The new premium for part B will be $99.90/month.

If you were on Medicare in 2008, your premium was frozen at $96.40, due to a law that freezes part B premiums in years that there are no COLA increases if you also receive social security.
If you started Medicare in 2009 – 2011, the premium was $115.40, so the premium will be reduced to $99.90 for those recipients.
Medicare premiums are higher for recipients that have Adjusted Gross Incomes of more than $85,000 for single and $170,000 for married taxpayers. Those premium adjustments have not been announced yet.

Medicare Part D prescription drug coverage and Medicare Advantage enrollment runs until December 7^th this year, which is earlier than in previous years when enrollment ran until the end of the year. A great resource to help you decide is on the medicare website:

www.medicare.gov/find-a-plan

You just need to provide information about your prescription drugs and you will see what each plan in your area will cost in premiums and out-of-pocket expenses.

About the author

Carol Somoano, MBA, CFP®

Carol Somoano, MBA, CFP^®Financial Advisor

Carol Somoano, Vice President of Asset Planning Inc., is a Certified Financial Planner, CFP^®, and is responsible for portfolio and financial plan analysis. Before Carol joined API, Inc in 2005 she worked as a management accountant for 15 years before deciding to concentrate on financial planning. Carol obtained her B.S. in accounting from Cal Poly Pomona and her MBA from Cal State Fullerton. She completed the UCI Financial Planning program and passed the CFP exam in March of 2004. She is also a Notary Public and Realtor^®.

She is an active member of the Orange County Financial Planning Association and has participated in the OC Register Annual Financial Planning Hotline. She is an active volunteer in her community and has received an Honorary and Continuing Service Award from the California State Legislature in 2003 and 2007.

Carol’s core values are client-focused, emphasizing long-term relationships built on confidence and trust. She works diligently to increase her client’s net worth, plan for their future, and ultimately enhance their lives today.

Carol's hourly financial planning rate is $250. Carol's portfolio management fee is a maximum of 1% and is discounted for portfolios over $250,000.

PH: 714-827-5794 | Email Carol

Asset Planning, Inc Blog

Social Security and Medicare changes for 2012

About the author

Carol Somoano, MBA, CFP®

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