Page 159 - TaxAdviser_2022

PERSONAL FINANCIAL PLANNING

Medicare Part B premiums by income level

Single filers Married filing jointly Married filing separately Monthly premium in 2022
$91,000 or less $182,000 or less $91,000 or less $170.10

Above $91,000 up to Above $182,000 up to Not applicable $238.10
$114,000 $228,000
Above $114,000 up to Above $228,000 up to Not applicable $340.20
$142,000 $284,000
Above $142,000 up to Above $284,000 up to Not applicable $442.30
$170,000 $340,000
Above $170,000 and Above $340,000 and less Above $91,000 and less
less than $500,000 than $750,000 than $409,000 $544.30

$500,000 or above $750,000 or above $409,000 or above $578.30

Based on 2020 income.
Source: Medicare.gov.

traditional Medicare coverage to MA. future, potentially keeping Medicare portfolio. Risk can be increased the older
MA includes health maintenance orga- costs lower and creating a tax-free pot someone gets, as fewer years remain
nizations (HMOs), preferred provider of money for the person’s lifetime or for needed to fund the lifestyle. Studies by
organizations (PPOs), private fee-for- future beneficiaries. Michael Kitces, head of planning strat-
service plans (PFFS), and Medicare egy at Buckingham Strategic Wealth,
medical savings account plans (MSAs). Sustainable withdrawal rates are essential reading if you are assisting
Many of these plans have vision and The challenge for PFP advisers is mak- clients with their investments and budget
dental coverage, which traditional Medi- ing sure their clients’ money will last (available at kitces.com).
care does not include. longer than they do. Establishing a with-
An individual still pays for Medicare drawal rate that will allow for the desired Longevity
Part B under MA. Medicare then bun- lifestyle and that lasts for the lifetime Medical advances and healthy lifestyles
dles the Part B premiums (and any Part of the client must overcome six major have extended peoples’ lives to where
A premiums paid by beneficiaries who challenges. The challenges, in no specific a CPA needs to be concerned about
do not receive it free) of the participants order, are (1) stock and bond market how to protect clients’ finances longer
in an MA and gives them to the MA to volatility; (2) sensitivity to the date of than has been necessary in the past. A
provide health care for that group. retirement; (3) fees and taxes; (4) the study by Chmielewski, Boryslawski,
withdrawal rate that would survive any and Strzelec, “Contemporary Views on
Roth conversions 30-year historical period; (5) the optimal Human Aging and Longevity,” 79-2
The perfect time for Roth conversions asset allocation; and (6) portfolio changes Anthropological Review 115 (2016),
is the period from leaving full-time to manage risk. attributed extended longevity to the fol-
employment until the beginning of What happens in markets in the lowing factors: genetics, lifestyle, level of
Social Security benefits and/or RMDs early years after someone stops working hygiene, social support, socio-economic
from IRAs and 401(k) plans. The abil- full time significantly affects his or her status, level of education, personality,
ity to tax these conversions at lower tax financial health for the rest of his or her intelligence, and more. CPAs and their
rates for seven to 10 years accomplishes life. The early years are when someone clients possess many of the traits listed
wonders in reducing RMDs in the needs to be the least exposed to risk in a for longevity.

50 March 2022 The Tax Adviser