Medicare payroll deductions are 1.45%, double that if you’re self-employed and there’s no cap on earnings, i.e. no limitation thresholds. All Americans pay the same per dollar earned into the Medicare program. Some view this as a tax, others view it as a contribution into their medical coverage when they become age 65 and throughout their retirement. But that’s where the equality or fairness ends. The U.S. tax code is a marginal-progressive tax bracket system that increases as certain income thresholds are achieved, a system has been around for over a century. But few understand that Medicare premiums are means tested. Most eligible Medicare recipients are paying the minimum of $135.50 a month, married couples double that at $271 assessed for 2019. But affluent seniors may be paying up to $460.50 a month, wealthy married couples $921.00 a month for the same benefits. And the real revelation is that the calculations for earnings go back two years! A fact that few financial advisers are aware of and not to mention the public at large. Over the last 15 years, retirement planning has embraced strategies to maximize Social Security, but little to no planning regarding Medicare. Most affluent seniors experience sticker   Read more…

Medicare, the federal health insurance plan for people 65 and over and those with certain disabilities, has made an enormous difference in the healthcare of an entire generation of Americans. If you qualify for Social Security either because you made FICA contributions while you were working or you’re married to someone who did, you automatically qualify for Medicare. And even if you weren’t part of the Social Security system, you may be eligible to purchase Medicare coverage for a monthly fee. If you’re collecting Social Security benefits, you’re automatically enrolled in Medicare Parts A and B, though you have a choice of whether to keep Part B. If you enroll for Medicare before you apply for Social Security benefits, you must decide whether to sign up for Part B. The second round of choices may be more complicated. Provided you’ve taken Part B coverage, you may be able to choose how you want to receive Medicare services, through Original Medicare or what is known as Medicare Advantage. Many seniors also purchase Medigap polices to cover what Part B doesn’t. If you’re collecting Social Security benefits, you’re automatically enrolled in Medicare Parts A and B, though you have a choice of   Read more…

A non-modified endowment life insurance contract permits access to its accumulated cash values for funding life events, emergencies and discretionary spending. Whether it’s for personal, business or legacy planning, cash value life insurance in tandem with the strategy of Your Family Bank, can be the cornerstone of your financial foundation.  The Arbitrage of Good Debt When you’re borrowing from your life insurance policy at 2-3%, your borrowing cost is low, lower than almost every other lending institution. Not even margin accounts are that low. Can you exceed that borrowing cost with your investment? Is the investment conservative? Have you taken a risk tolerance test? Remember, bad debt for depreciating items is double indemnity for good money. Tax Favored Treatment Earnings accumulate tax deferred.  Distributions are tax free and may be transferred to the next generation or the next generation after that or to a favorite charity, tax free. Defeating taxes on every government level is a worthy goal. There are few financial products that can achieve such a broad application in tax defense. The Low Opportunity Cost of Money Interest driven investments like CDs, fixed rate annuities or participating whole life have earnings that are the measuring stick for investing.   Read more…