COVID Surge | Savings for Medicare Part B | Adjusted RMDs

This COVID Surge Is America’s Longest—and It’s Getting Longer–from Bloomberg: The American pandemic’s most sustained increase in COVID-19 infections appears poised to get even longer, a worrisome indicator for overworked doctors and nurses.

The nationwide uptick in cases that became noticeable around mid-September is now in its ninth week, counting from the previous low point in the seven-day average. That’s a longer run than the March-April tragedy that unfolded largely in the Northeast, and the June-July upswing, which hit the Sun Belt hardest.

The new cases come as cold weather moves in, forcing many Americans indoors. The situation also has been compounded by pandemic fatigue, which makes public-health efforts such as masking and social distancing more challenging.

The latest upswing may not have initially been the most dramatic, but it started from a much higher base.

By hospitalizations, the picture is similarly grim. In this third surge, patients hospitalized with COVID-19 started increasing more than seven weeks ago, the longest streak yet.

Promise of a Vaccine is Even Closer: Positive news came this week from Pfizer and their German partner, BioNTech, about new clinical trial data. This article from the New York Times covers a lot of ground about the results, how the trial was conducted, the safety and efficacy of the vaccine, and a timeline for its rollout. Ten other vaccines are in late-stage trials and experts appear optimistic these other projects will be effective.

As the article notes, “widespread success of coronavirus vaccines would be a huge boon to the world’s health, because Pfizer and BioNTech alone cannot meet the full demand.”

Helping Clients Save Money on Medicare Part B: A note for individuals with Medicare Premiums in retirement (for individuals over age 65). As your modified adjusted gross income (MAGI) increases above certain thresholds, Medicare Part B premiums can also increase for a given year. Medicare Part B premiums for the current year are calculated based on your MAGI from two years prior. An uncommonly known fact is that if a Medicare eligible individual retires earlier in a given year, enrolls in Medicare, and knows that their income for the current year will be lower than two years prior, there is a way to appeal the Medicare Part B premium for that year, which can save thousands of dollars depending on the individual. We recently walked a client through this process and helped them save approximately $9,000 for the year.

The article below explains seven life changing events that could cause a significant reduction in income and trigger the appeals process. If you or a loved one would like to discuss this topic in further detail to see if you may benefit, please let us know.

Medicare Part B – Premium Appeals

Planning Corner: Good news! You can look forward to somewhat smaller required minimum distributions (RMDs) from your IRA and company retirement savings plan—but not until 2022. On November 6, the IRS released new RMD life expectancy tables. RMDs are waived for 2020, and RMDs for 2021 will be calculated under the current tables.

The IRS revised the current tables, effective since 2002, to reflect the fact that Americans are living longer.

A smaller RMD means less taxes and more retirement savings can be retained for tax-deferred growth. Of course, you can always take more than your RMD if you wish. Failing to take your full RMD can result in a penalty equal to 50% of the amount not taken, although the IRS will often waive that penalty.

To give some perspective, in a generic example given by Slott & Company in this article, a person turning 72 with a $300,000 IRA saw a reduction in her RMD by about 7%.

Gaming Consoles as a Win/Win: Last week we highlighted some outdoor entertainment possibilities with a story about Top Golf. As we approach colder temperatures, this article from Visual Capitalists shows the average cost per hour for various entertainment choices as we head indoors. It turns out both traditional gaming consoles (like Nintendo and PlayStation) and streaming gaming (SaaS), are both cash cows for the producers, while attractive money savers for users (as per the chart below). If you think you’re too old to play video games, think again!