John very good to see you! Big social security news, the COLA jumps 3.2%, but Medicare Part B is at 5.9%. The cost of living adjustment reflects another year of high inflation, but we now know we will be paying almost 6% more for Medicare Part B. So does this mean that we will see a small benefits check in January?

Yeah, well you know it’s Christmas time, that’s the time of year and we are getting a little bump with socal security. And in regards to the check, your checks will be larger because your social security, lets say is on a $3,000 home security check.That is going to get the 3.2% increase. But if you are claiming Medicare, then you're going to have that 5.9% increase. So as my cohost and good friend Tom O'Connell says, the government giveth with the social security COLA and taketh with the Medicare tax premium. And remember, taxes are our biggest expense, and health care is our next biggest expense in retirement.

Right. Does this cost of living adjustment affect when we should be claiming our benefits?

No. And you know, ultimately the COLAs should not have any effect on your claiming. There's a lot of other things that go into the claiming strategy. But remember, every year you delay, you're gonna get an 8% increase on your income. That's a guaranteed roll up at this point in time. So that's a very hard number to pass up. And remember, you know, the length of security benefits can have a multitude of advantages, future tax planning advantages and most importantly, survivorship income.

So now let's hop into the not so good news. 2024 Medicare Part B will be $174.70 which again is that 5.9%. This premium usually comes straight out of your Social Security check, explain how this works.

Yeah so if you're collecting Social Security and you're also on Medicare, your Part B premiums will come out of your social security check as many of you may have seen. If you're not claiming social security, then you will actually receive a premium billing from Medicare itself. So that's, those are the two ways that you pay for Medicare. Now, again, looking at this chart, you know the $174 is the lowest threshold of the Medicare premium, or let's just cross the word premium out and put tax. Because this is a, this is a tax gotcha. This is a retirement tax trap. So if you're in 2024, married file and jointly, and your modified adjusted gross income is $206,000 and that could come from a multitude of things, from your IRA distributions, pensions– if you cross that threshold by just one dollar, your Medicare premiums is going to go up $70 per person per month, and that's a substantial tax on $1. And, you know, you know as you see here, your Medicare premium is dependent on where your income falls. This could go anywhere from $174 to $675. So this is one thing that we do with our clients, is we're always mindful of trying to get our clients in the lowest Medicare firma tax bracket as possible.

I you specialize in that, John. So I think, you know, we need to ask the question because 75% of people 50+ worry that Social Security will be insolvent in their lifetime. Does this cost of living increase affect the program's insolvency?

Yes, so I think the biggest problem with the program's insolvency is the fact that we have the largest generation of wealth moving into retirement, the boomers. And when Social Security was first developed, we had three people paying in for every one person taking out and those numbers are radically flipped upside down now. So I think the biggest problem is just the number of boomers now claiming social security to the number of employees and employers actually paying into Social Security. But ultimately, you know, I think for boomers, all the experts say social security will be around, but adjustments will be made. And we've seen adjustments in the past that the elimination of files and suspend and restricted applications so my key point here is expect and prepare for change that is not going to be in your favor, and do not depend on the government, right? Have your own predictable sustainable income streams and let the Social Security be a benefit. And that's a hard task because you know nowadays, half of today's retirees income comes from Social Security. But just plan on changes and, you know, being made to your plan and social security.

Right, always good to plan ahead, John, if somebody has questions about claiming Social Security or again, Medicare taxes, what's the best way to reach you?

Yeah, well, we always tell people, visit our website, www.gosecurus.com. We have a ton of information podcast videos in the past on Social Security and Medicare. And while you're on the website, you can visit the Contact Us tab. From there, you can actually schedule a 15-minute phone call to answer any questions or a one-hour complimentary vision and clarity consultation. If you like doing things the old-fashioned way, you always give us a call at the office at 858-935-6210, and Emily can get you on my schedule.

John, thank you so much.

Thank you Erin.