Posted on Friday, 9th May 2014 by

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Turning 65 often proves to be a pivotal year for retirees.  I’ll be 65 next month and discovered many tasks await us at this juncture in our lives. There are many things to consider and first and foremost I’m grateful that I made it to this milestone; many don’t, including my parents and grandparents on my father’s side. None of which lived long enough to collect Social Security.  

Starting this month my FEGLI is FREE and my monthly annuity payment will increase by the amount of my previous FEGLI premium. I elected the 75% reduction when I retired in 2005 and paid the monthly premiums for the past 10 years.  During those 10 years I retained full coverage that equaled my base pay plus $2,000. Over the next 36 months or so the coverage drops 2% per month until it reaches 25% of the original value.

Speaking of free, in the previous article I discussed final arrangements and talked about the veteran’s National Cemetery burial benefit. My wife and I finalized our plans and decided to take advantage of this program which can save veterans and their spouses close to $10,000 in burial costs.  Two of my cousins, my brother, and other family members and friends will eventually be there as well. Of course I hope that my heirs won’t be able to take advantage of this benefit for many years to come. I at least wrote down our wishes and checked off another item on my to-do list. Strangely enough my to-do list never seems to get smaller even though I keep checking off item after item. I suppose that’s a good thing, adding new actions that need to be done, proving that I’m not content to just sit on the sideline.

Medicare is the next item on my list. You have a 7 month window starting three months before your 65th birthday to apply without a penalty. I decided to apply in the 7th month because I converted one of our retirement accounts to a ROTH two years ago. Social Security obtains your Modified Adjusted Gross Income (MAGI) from the IRS each year. The problem is that Social Security’s information can be from income tax returns that are up to two years old. If I wait until August Social Security may have updated income figures from the IRS. Your part B premiums are based on your (MAGI) and they can more than double if you don’t time ROTH conversions, TSP withdrawals, and/or capital gains properly.

If you apply for Medicare and your Part B premium is based on a higher MAGI you can file a Medicare Income Adjustment SSA-44 form. This form allows you to submit recent tax returns and other documentation that support a lower income than Social Security estimated.  Another reason for the delay on my part is that it takes about 2 months from the date you apply for Medicare to go into effect. Therefore I’ll save about 5 to 6 months worth of Part B premiums. Our FEHB plan will remain primary until Medicare kicks in. I debated for months whether or not to apply for Part B and after much research and thought decided it made sense for me and my family.  The vast majority of retirees elect Part B and for good reason.  Review my Medicare and Part B article for additional information on this subject. NARFE members can also visit the NARFE web site and read Tammy Flanagan’s excellent article on this subject. 

The good thing about turning 65 is that I turned 65 and that my wife and I are still able to do pretty much what we like to do, with limitations of course.  The bad and inevitable part is that I still think I’m in my forties when it comes to projects and I frequently bit off more than I can now chew. For example, I love to work on home projects and over the years I’ve landscaped 5 properties planting hundreds of trees and shrubs plus built patios, decks, room editions, and so much more. Now, after three hernia surgical repairs and knee surgery I can’t physically take on those projects anymore without contracting much of it out.  Inevitable, YES but the good thing is that I can still do the planning but now have to pay someone else to do the work I use to enjoy.  Such is life.  

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Last 5 posts by Dennis Damp

Posted in BENEFITS / INSURANCE, ESTATE PLANNING, FINANCE / TIP, RETIREMENT CONCERNS, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION | Comments (0)


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