7. Manage Medicare premiums.
Use timing and deferral strategies to manage Medicare premiums. Advisers need to watch clients’ income levels when the time comes to pay Medicare premiums. Standard premiums this year for Medicare Part B are at $104.90, and applicable to individuals with a modified adjusted gross income of $85,000 or less ($170,000 for married couples). Beyond that income threshold, however, clients pay more for Medicare Part B and Medicare Part D prescription coverage.
It’s easy to dismiss those additional expenses when it comes to high-net worth clients, but advisers should know that if a client ends up even one dollar over the threshold, he or she will be bumped into the next category for premiums and will have to pay more. And those additional monthly premiums add up. “You don’t want to be that retired person who is single and has $85,001 in income and now you have to pay another $500 in premiums,” said Mr. Keebler. The lesson here: Smooth your income flow so you save on taxes and on Medicare premiums.