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The Largest Increase in 40 years will come to Social Security recipients in January
Every fall, the Social Security Administration makes an announcement that has a major impact on the 66 million people who receive benefit checks. The annual inflation adjustment is aimed at keeping seniors from losing purchasing power.
The agency has announced its 2023 cost-of-living adjustment, or COLA, will be 8.7%, the highest since 1981. The Social Security Administration bases its COLA on the inflation rate during the third quarter, or July through September — with the government earlier on Thursday saying that inflation in September jumped 8.2%.
The Social Security Administration said the average monthly benefit will rise by more than $140 a month, with the typical payment jumping from $1,681 to $1,827.
In 1981, seniors got a benefit boost of 11.2%. There are only two other years when seniors received COLAs bigger than this year's increase: 1980, when benefits got a 14.3% hike, and 1979, when benefits rose by 9.9%. There have also been several years when beneficiaries received no bump at all, such as in 2009 and 2010, when the COLA was 0% due to flat-lining inflation during the post-financial crisis years.
Even though the Social Security Administration announced the adjustment this week, seniors and others on the program will have to wait until January to receive their higher payments.
While the COLA will actually go into effect with the December 2022 benefits, those payments will be made in January 2023.
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Part B Premiums are going DOWN for 2023
In 2023, the premium for Part B, medical insurance, is going down by $5.25, to $164.90. After last year’s hefty increase, Medicare beneficiaries are relieved to see the amount decrease.
Since 2007, higher-income beneficiaries have paid more for Part B (in addition to the monthly premium) because of IRMAA, the Income-related Monthly Adjustment Amount. Social Security uses a special modified adjusted gross income (MAGI) to identify those subject to IRMAA. The MAGI is the total of tax-exempt interest and adjusted gross income from the income tax statement of two years prior. (In some cases, Social Security may use the statement from three years ago.) When that MAGI crosses the threshold, Social Security sends a “welcome to the IRMAA club” letter, the initial IRMAA determination notice. There are two initial thresholds:
After crossing the threshold, there are five tiers or levels of additional amounts that are paid on top of the Part B premium. Since 2020, the thresholds have been adjusted for inflation.
IRMAA is pegged to the Part B premium. When the premium goes up so do the amounts higher-income beneficiaries pay. For example, in 2022, when the Part B premium jumped almost $22, IRMAA amounts increased by $8.60 at the lowest tier up to $51.80 at the top tier.
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Hearing Aids are Now Available at Best Buy, Costco, Walgreens, Walmart and More Over-The-Counter Options starting Monday, October 18th.
We discussed the coming change earlier this year in our newsletter, and now it is a reality as of the 18th of October.
Millions of people with hearing loss can now purchase hearing aids without prescriptions or medical exams from Walgreens, CVS and Best Buy, according to the companies.
Walgreens on Monday started selling over-the-counter hearing aids online and at its stores nationwide for $799 a pair. By comparison, the average cost of prescription hearing aids can range between $2,000 and $8,000, according to the company.
Walmart is also offering over-the-counter hearing aids online and in stores in Colorado, Michigan, Missouri, Ohio, Pennsylvania, Tennessee and Texas. The devices will be available at additional locations nationwide, according to the company. Prices range from $199 to $999 depending on the device.
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The Open Enrollment period began October 15th
and runs through December 7th.
Now that Medicare Open Enrollment is here, it is time to remember 2 things. One, do not take advice and hype from aging athletes and actors. And two, there are changes coming in the 2023 Medicare plans that may impact you. In most cases, if you want to stay on your current plan, there is nothing to do, your plan will automatically rollover for next year. If you need assistance to compare your current Medicare plan with the Medicare plan options for 2023, please contact us, your trusted source for Medicare insurance.
Here are some details on Medicare changes for 2023:
- More vaccines will be free to recipients in 2023. Two-shot shingles will have zero co-pays along with flu shots, pneumonia vaccinations, hepatitis-B, and Covid vaccines.
- Insulin will be capped at $35. Beginning next year, Medicare recipients will pay no more than $35 for a 30-day supply off insulin even if they have not met their Part D deductible.
- Medicare Part A (which provides hospital insurance) deductible will increase to $1600, an additional $44 over this year.
During Open Enrollment many seniors are misled by marketing gimmicks and scams. It is recommended not to answer calls from numbers or email addresses you do not recognize. Do not give out your personal information to anyone unless you are know them personally.
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BELOW IS AN EXAMPLE OF REAL SCAM LETTER RECEIVED BY A CLIENT
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HOW IS YOUR ANNUITY DOING?
The market is as volatile as a fishing boat caught in a squall coming to port. People are looking for help, if you are one of those people, you might as well turn to your trusted advisor. Here at Litchfield Insurance Associates, we have partnered with an annuity expert, John Roberts.
John specializes in Safe Retirement Income and Living Trusts. If you are looking for direction with either of these important decisions, please give us a call at 951-769-0005 and we will schedule you a no obligation, free consultation appointment to meet with John.
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